T.C. Summary Opinion 2004-53
UNITED STATES TAX COURT
LARRY E. AND BARBARA L. ANDRA, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 20242-02S. Filed May 11, 2004.
Larry E. Andra, pro se.
Wesley F. McNamara, 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
1
Unless otherwise indicated, subsequent section
references are to the Internal Revenue Code in effect for the
year at issue. Rule references are to the Tax Court Rules of
Practice and Procedure.
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is not reviewable by any other court, and this opinion should not
be cited as authority.
Respondent determined a deficiency of $1,100 in petitioners’
Federal income tax for the year 2000.
At the time the petition was filed, petitioners' legal
residence was Preston, Idaho.
Petitioners filed a Federal income tax return for the year
2000 that showed a tax liability of $5,231, an estimated penalty
of $42, and a withholding credit of $777. Petitioners did not
pay the $4,496 balance at the time they filed their return.
During the year 2000, petitioners received an early distribution
from an individual retirement account (IRA) in the amount of
$4,402. Petitioners did not include the $4,402 as income on
their tax return. After being contacted by the collection
division of the Internal Revenue Service, petitioners made
arrangements to pay their tax liability in a series of
installments. Petitioners contend that, in their negotiations
for the installment arrangement, it was their understanding that
the income tax due on the IRA was included in the total amount
they were to pay to the Internal Revenue Service. The sole
issue, therefore, is whether petitioners paid the $1,100
deficiency, which is the tax due on the IRA distribution they
received during the year 2000. Respondent agrees that, except
for the $1,100 attributable to the IRA, the taxes, including
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interest and penalties, on the income reported by petitioners on
their 2000 return have been paid. Petitioners agree that the IRA
distribution was includable in gross income.
Contrary to this Court's Rules of Practice and Procedure,
the parties did not file with the Court a written stipulation of
facts. Rule 91. Nonetheless, respondent offered into evidence
at trial the necessary documentary information upon which the
Court makes its findings of fact and opinion. The facts, as
recited, are not in dispute, except petitioners' contention that
payments they made to the Internal Revenue Service included the
tax on the pension distribution upon which the notice of
deficiency is based.
The pension plan distribution was evidenced by the issuance
by the payor of a Form 1099-R, Distributions From Pensions,
Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance
Contracts, etc., filed with the Internal Revenue Service. As
noted, petitioners acknowledge receipt of the proceeds of the
distribution.
Sometime after petitioners filed their 2000 income tax
return, they were contacted by collection agents of the Internal
Revenue Service relative to the unpaid tax shown on their 2000
tax return as well as unpaid tax for their 2001 tax year.
Although petitioners contend that the matter of the IRA
distribution was discussed, and they understood that their
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installment agreement included payment of the income tax due on
that distribution, there is no evidence in the record, nor do
petitioners contend that they ever agreed to an assessment of the
deficiency attributable to that income item. The notice of
deficiency included a form that petitioners could have signed by
which they agreed to an immediate assessment of the deficiency,
in which event, it would have precluded their right to contest
the deficiency in this Court and would have allowed respondent to
proceed with assessment and collection of the tax due on the IRA
distribution. Petitioners did not sign this waiver and instead
filed their petition in this Court in which their sole contention
is that the various payments to the Internal Revenue Service
included the tax liability associated with the IRA.
At trial, respondent offered into evidence the official
transcripts of petitioners' accounts for the years 2000 and 2001.
All of the entries in these accounts were reviewed at trial, and
petitioners presented no evidence reflecting any errors in these
entries, nor proof of any additional payments not shown on the
transcripts. These transcripts show that petitioners fully paid
their tax liabilities for the 2 years in question as reported on
their income tax returns for those years. The transcript for the
year 2000, however, does not reflect any assessment for the tax
due on the IRA distribution reflected on the Form 1099-R, nor is
there any evidence that petitioners ever consented to an
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assessment or that respondent ever made an assessment relative to
this distribution. The payments and credits on the transcripts
reflect payment of the tax liabilities reported on the returns
including interest and penalties, and the transcripts reflect no
amounts in excess of the tax liabilities for the 2 years as
reported on petitioners' income tax returns. Respondent's
position is that the tax due on the IRA distribution was not
assessed, and, since petitioners instituted this action,
respondent is precluded from making an assessment.
The Court agrees with respondent that the transcripts of
petitioners' accounts for 2000 and 2001 do not reflect an
assessment of the deficiency attributable to the IRA distribution
to petitioners.
Generally, no assessment or collection of a deficiency in
tax can be made against a taxpayer until there is mailed to the
taxpayer a notice of deficiency under section 6212(a). Once a
notice of deficiency is issued, and the taxpayer files a timely
petition with this Court, the restrictions on assessment and
collection generally continue until such time as the decision of
this Court becomes final. Any premature assessment or collection
of a deficiency may be enjoined by a proceeding in a proper
court, including the Tax Court. Sec. 6213(a).
The restrictions on assessment and collection do not apply
in certain situations set out in section 6213(b), (c), (d), and
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(e). In such situations, the deficiency may be assessed and
collected against the taxpayer upon notice and demand. Section
6213(d) provides:
(d) Waiver of restrictions.-–The taxpayer shall at any
time (whether or not a notice of deficiency has been issued)
have the right, by a signed notice in writing filed with the
Secretary, to waive the restrictions provided in subsection
(a) on the assessment and collection of the whole or any
part of the deficiency.
Section 301.6213-1(d), Proced. & Admin. Regs., provides that,
after a waiver has been acted upon by the District Director, and
the assessment has been made in accordance with its terms, the
waiver cannot be withdrawn, and collection can be undertaken
against the taxpayer.
In this case, respondent never made an assessment against
petitioners for the tax deficiency attributable to the IRA
distribution, and, indeed, respondent was prohibited from making
an assessment in the absence of a waiver or consent by
petitioners. Petitioners never consented to an assessment. If
agents of the Internal Revenue Service represented to petitioners
that their tax payments included the deficiency arising from the
IRA distribution, such representation was in error. It has long
been held that respondent is not estopped and cannot be bound by
erroneous acts or omissions by agents of the Internal Revenue
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Service. Estate of Emerson v. Commissioner, 67 T.C. 612, 617-618
(1977).
The Court is satisfied from the record that petitioners'
payments to the Internal Revenue Service did not include payment
of the tax attributable to the IRA distribution. Accordingly,
respondent is sustained.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent.