T.C. Memo. 2007-311
UNITED STATES TAX COURT
GARY DEAN AND TERI COLLEEN MADDEN, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 23403-05. Filed October 15, 2007.
Gary Dean and Teri Colleen Madden, pro sese.
Hans Famularo, for respondent.
MEMORANDUM OPINION
MARVEL, Judge: Respondent determined a deficiency in
petitioners’ Federal income tax of $1,779 for 2003. The issue
for decision is whether we have jurisdiction to review the
crediting by respondent, pursuant to his authority under section
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6402(a),1 of an overpayment made by petitioners in 2003 towards
petitioners’ unpaid 1991 and 1992 tax liabilities.
Background
Petitioners resided in Banning, California, when the
petition in this case was filed.
Petitioners timely filed their joint Federal income tax
return for 2003. On their return, petitioners claimed an
overpayment of $2,372.90. Petitioners also reported a premature
distribution of $17,786.51 from their qualified retirement plan.
Petitioners did not indicate on their return that they were
liable for any additional amount as a result of this premature
distribution.
Respondent applied petitioners’ 2003 overpayment to their
unpaid tax liabilities for 1991 and 1992.2 Respondent
subsequently determined that petitioners’ early distribution from
their qualified retirement plan resulted in a 10-percent
additional tax under section 72(t).3 Accordingly, respondent
1
All section references are to the Internal Revenue Code in
effect for the year in issue.
2
Respondent applied $874.85 against petitioners’ 1991 tax
liability and the remaining $1,498.05 towards petitioners’ 1992
tax liability.
3
Sec. 72(t)(1) generally provides that if a taxpayer
receives any amount from a qualified retirement plan, the
taxpayer’s Federal income tax liability is increased by an amount
equal to 10 percent of the portion of the amount received from
the plan which is includable in gross income. Sec. 72(t)(2)
(continued...)
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determined a $1,779 deficiency in petitioners’ 2003 Federal
income tax,4 and on September 12, 2005, respondent issued a
notice of deficiency to petitioners.
On December 12, 2005, petitioners filed their petition.
Petitioners argue that their 2003 overpayment should have been
applied to cover the $1,779 deficiency that resulted from the
additional tax required by section 72(t)(1).5 Petitioners’ case
was set for trial at the Court’s February 5, 2007, Los Angeles,
California, trial session. On February 5, 2007, petitioners
failed to make an appearance, and respondent submitted a motion
to dismiss for lack of prosecution. Petitioner Gary Madden,
however, appeared before the Court on February 6, 2007, and we
set petitioners’ case for recall.6 On February 8, 2007, we
denied respondent’s motion to dismiss for lack of prosecution and
conducted a trial.
3
(...continued)
lists the circumstances in which a taxpayer is permitted to
receive distributions from his or her qualified retirement plan
without incurring the 10-percent additional tax mandated by sec.
72(t)(1).
4
The $1,779 deficiency calculated by respondent is 10
percent of $17,786.51, the amount of the distribution from
petitioners’ retirement plan includable in gross income.
5
Petitioners concede that they are liable for the $1,779
deficiency under sec. 72(t).
6
Petitioners mistakenly believed their case was calendared
for Feb. 6, 2007.
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Discussion
Under section 6402(a), the Secretary, within the applicable
period of limitations, may credit any amount of an overpayment
against any liability attributable to an internal revenue tax
owed by the person who made the overpayment. As discussed above,
respondent credited petitioners’ 2003 overpayment to petitioners’
outstanding tax liabilities for 1991 and 1992. Petitioners would
have us recredit their 2003 overpayment towards their $1,779
deficiency for 2003 to cover the 10-percent additional tax
resulting from the early withdrawal from their retirement
account. Petitioners offer no support for their argument that we
possess jurisdiction to recredit petitioners’ overpayment.
We cannot recredit petitioners’ overpayment. The Tax Court
is a court of limited jurisdiction and may exercise its
jurisdiction only to the extent expressly authorized by Congress.
Naftel v. Commissioner, 85 T.C. 527 (1985). Pursuant to section
6512(b)(4), we do not have jurisdiction to review any credit made
by the Commissioner under section 6402(a). See Bocock v.
Commissioner, 127 T.C. 178, 182 (2006); Savage v. Commissioner,
112 T.C. 46, 49-51 (1999). Accordingly, we do not have
jurisdiction to decide whether respondent properly credited
petitioners’ 2003 overpayment to tax years 1991 and 1992.
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To reflect the foregoing,
Order of dismissal for lack
of jurisdiction will be entered.