T.C. Summary Opinion 2002-125
UNITED STATES TAX COURT
RICHARD S. AND MARY L. GARCIA, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13479-00S. Filed October 3, 2002.
Richard S. and Mary L. Garcia, pro se.
Natasha V. Chevalier, for respondent.
COUVILLION, Special Trial Judge: This case was heard
pursuant to section 7463 of the Internal Revenue Code in effect
at the time the petition was filed.1 The decision to be entered
is not reviewable by any other court, and this opinion should not
be cited as authority.
1
Unless otherwise indicated, subsequent section
references are to the Internal Revenue Code in effect for the
year at issue. All Rule references are to the Tax Court Rules of
Practice and Procedure.
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Respondent determined a deficiency of $5,607 in Federal
income tax and the 10-percent additional tax under section 72(t)
for an early distribution from a qualified retirement plan with
respect to petitioners' 1997 tax year. After concessions by the
parties, the sole issue for decision is whether, under section
6402, respondent properly credited a payment by petitioners to
their 1996 tax year instead of 1997 as contended by petitioners.2
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and are made part hereof.
Petitioners' legal residence at the time the petition was filed
was Irving, Texas.
Petitioners' 1997 joint income tax return reflected total
tax payments of $7,500, a tax liability of $3,009, and an
overpayment of $4,491. At trial, respondent conceded that
petitioners had made one additional payment of $582 on their 1997
2
Respondent conceded an unreported interest income
adjustment of $211, an unreported pension and annuity income
adjustment of $97.44, and the 10-percent additional tax under
sec. 72(t). Respondent also conceded petitioners' entitlement to
a trade or business expense deduction of $627 attributable to a
self-employed activity of Mrs. Garcia. Petitioners conceded
their liability for self-employment taxes on the net income from
Mrs. Garcia's trade or business activity, and respondent conceded
petitioners' entitlement to a deduction for one-half of the self-
employment tax under sec. 164(f). Petitioners further conceded
that the Social Security benefits paid to Mr. Garcia during 1997
totaled $11,385 instead of $10,740 reported on their return.
Finally, respondent conceded petitioners' entitlement to an
additional dependency exemption for their daughter, which they
had not claimed on their return.
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taxes. Thus, petitioners' tax payments for 1997 totaled $8,082.
At trial, petitioners contended their payments for 1997 taxes
totaled $10,082, evidenced by the following payments:
$ 2,000 By check dated Feb. 8, 1997
2,000 By check dated May 15, 1997
2,000 By check dated July 2, 1997
2,000 By check dated Dec. 3, 1997
1,500 By check dated Mar. 11, 1998
582 By bank money order dated Dec. 23, 1999
$10,082 Total
Respondent agreed that the payments shown above were in fact
made by petitioners and credited to their tax account. However,
the first payment shown above, for $2,000 by check dated Feb. 8,
1997, was credited to petitioners' 1996 taxes; thus, the payments
credited to petitioners' 1997 taxes totaled $8,082. Petitioners'
position is that the $2,000 payment on Feb. 8, 1997, should have
been credited to their 1997 tax account instead of 1996.
The $2,000 check dated Feb. 8, 1997, did not bear any
notation to indicate the tax year to which the payment was to be
applied or credited, nor was the check accompanied by a voucher
or cover letter requesting or directing that the check be
credited to a specific tax year.
Under section 6402, the Commissioner is expressly authorized
to credit the amount of an overpayment against any tax liability
of the taxpayer. Sec. 6402(a). Section 6512(b) generally
defines this Court's jurisdiction to determine overpayments.
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Paragraph (4) of that section serves to deny jurisdiction to this
Court "to restrain or review any credit or reduction made by the
Secretary under section 6402." Sec. 6512(b)(4).3 Respondent
credited the $2,000 payment at issue to petitioners' 1996 taxes.
At the time of the payment, there were no instructions from
petitioners to the contrary. Section 6512(b)(4) clearly
restricts the jurisdiction of this Court to consider petitioners'
contention that this credit should have been made to their 1997
taxes because to do so would constitute the review of a credit
under section 6402. The Court, therefore, cannot consider
petitioners' claim that the payment at issue should have been
credited to their 1997 taxes. Petitioners, therefore, paid
$8,082 on their 1997 tax liability, and the Court so holds.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
under Rule 155.
3
Sec. 6512(b)(4) was added by the Taxpayer Relief Act of
1997 (TRA 1997), Pub. L. 105-34, sec. 1451(b), 111 Stat. 788,
1054. Sec. 6512(b)(4) became effective on Aug. 5, 1997, TRA 1997
sec. 1451(c), 111 Stat. 1054, and is therefore applicable to this
case.