T.C. Summary Opinion 2008-43
UNITED STATES TAX COURT
JOAN B. SINGLETON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 256-05S. Filed April 23, 2008.
Joan B. Singleton, pro se.
John F. Driscoll, for respondent.
CARLUZZO, Special Trial Judge: This section 6330(d)1 case
was heard pursuant to the provisions of section 7463. Pursuant
to section 7463(b), the decision to be entered is not reviewable
by any other court, and this opinion shall not be cited as
precedent for any other case.
1
Unless otherwise indicated, section references are to the
Internal Revenue Code of 1986, as amended, in effect for the
relevant period.
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“Bad things happen if you fail to pay federal income taxes
when due.” Hinck v. United States, 550 U.S. ___, ___, 127 S. Ct.
2011, 2013 (2007). Petitioner failed to pay her 1991 Federal
income tax when due. Her Federal income tax return for that year
was not filed until August 3, 1995, and the tax liability
reported on that return was neither previously paid nor paid with
the return. Because she failed timely to file Federal income tax
returns, or pay her Federal income tax liabilities for the years
1990, 1992, and 1993 as well, the things that happened went from
bad to worse.2
Background
The Federal income tax liability reported on petitioner’s
1991 return is $772, which consists entirely of the tax imposed
on her self-employment income for that year. See sec. 1401.
2
Petitioner’s filing history is hardly exemplary. Her
Federal income tax returns for 1990, 1991, 1992, 1993, 1996,
1997, 1998, 1999, 2000, and 2001 were all filed late. She
overpaid her income tax for some of those years and underpaid her
tax for others. Her expectations as to how the overpayments from
certain years should be treated were not consistent with the
manner in which respondent, pursuant to sec. 6402(a), actually
treated those overpayments.
At the same time that respondent was attempting to collect
petitioner’s 1991 tax liability, respondent was attempting to
collect her outstanding tax liabilities for other years as well.
This situation caused numerous complications, misunderstandings,
and disagreements between petitioner and respondent over matters
that otherwise should have been easily resolved. The petition
references the years “1990-1993, 1996” and describes credits from
overpayments from later years as improperly applied to one or
more of these years. In response to respondent’s jurisdictional
motion, so much of this case as relates to any year other than
1991 has been previously dismissed for lack of jurisdiction.
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When her 1991 return was processed in September 1995, that amount
was assessed, along with various additions to tax and interest.
Over the years, additional amounts of penalties and interest
accrued, and an amount recovered by levy,3 as well as an
overpayment from another period were credited against
petitioner’s 1991 account. As of October 13, 2003, petitioner’s
1991 unpaid tax liability, including related amounts, totaled
$842.23.4
In correspondence with respondent, petitioner took the
position that respondent should credit the $1,122.87 refund
claimed on her 1990 return, which she also filed on August 3,
1995, against her outstanding 1991 tax liability. Petitioner’s
1990 return is not in the record. According to the stipulation
of facts, her 1990 return shows no income tax liability, and
the refund claimed on that return is attributable entirely to
income tax withholdings.
In correspondence between petitioner and respondent during
2003, petitioner was advised that the allowance of any credit
from 1990 was barred by the statute of limitations. See sec.
6511. Petitioner disagreed. She failed or refused to make any
3
The levy, made in 1997, preceded the effective date of
sec. 6330.
4
The computation of this amount was provided to petitioner
by respondent in a letter, the details of which can fully be
appreciated only if read. The letter is part of a supplement to
petitioner’s objection to respondent’s jurisdictional motion.
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additional payments towards her 1991 tax liability, which, of
course, invited the accrual of additional interest and penalties.
In a notice dated February 25, 2004, petitioner was notified
of respondent’s intent to levy in order to collect her
outstanding 1991 Federal income tax liability. That notice also
advised petitioner of her right to request an administrative
hearing in order to challenge respondent’s proposed collection
action, which she did. See sec. 6330. At the administrative
hearing, petitioner once again claimed she owed nothing for
1991 because she was entitled to a credit for the refund of
the overpayment shown on her 1990 return. Once again, she was
advised that the allowance of any credit from 1990 was barred by
the statute of limitations. As an alternative to the proposed
levy, petitioner was offered an installment agreement, but she
did not respond to the offer.
In a Notice of Determination Concerning Collection Action(s)
Under Sections 6320 and/or 6330, dated December 3, 2004,
respondent determined that the “proposal to issue a tax levy to
collect [1991] unpaid taxes is appropriate”. Petitioner, who is
an attorney, timely petitioned this Court in response to that
notice. She was living in Alabama at the time.
Discussion
In proceedings such as this, in addition to issues not
raised here or during the administrative hearing, a taxpayer may
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challenge the existence or the amount of the underlying liability
to which the proposed collection action relates if the taxpayer
did not receive a notice of deficiency or otherwise have an
opportunity to challenge that liability. Sec. 6330(c)(2). A
taxpayer’s claim to have paid an income tax liability arising
from an otherwise unchallenged assessment can be viewed as a
challenge to the existence or the amount of that liability within
the meaning of section 6330. Boyd v. Commissioner, 117 T.C. 127,
131 (2001). In such situations, we review de novo the taxpayer’s
claim to have fully or partially paid the underlying liability.
Id.
Our review of petitioner’s claim starts with respondent’s
records. Those records clearly demonstrate that petitioner has
an outstanding 1991 Federal income tax liability. According to
petitioner, that outstanding liability would be reduced, if not
completely eliminated, if she were given credit for the refund
claimed on her untimely filed 1990 return. Respondent’s records
suggest that petitioner’s point is well made and confirm that her
outstanding 1991 tax liability does not take into account any
credit from a 1990 overpayment of tax.
Petitioner’s entitlement to the relief she seeks in this
proceeding depends upon whether she is entitled to a refund for
1990, and if so, whether respondent is obligated to credit that
refund against her 1991 liability.
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Respondent supports his failure or refusal to offset all or
any portion of petitioner’s 1991 tax liability by the allowance
of any credit from 1990 upon the ground that the period of
limitations for claiming the refund shown on petitioner’s 1990
return had expired before her 1990 return, on which she made the
refund claim was filed. See sec. 6511; Commissioner v. Lundy,
516 U.S. 235 (1996). Petitioner, on the other hand, argues that
her refund claim made on her 1990 return was timely. For the
following reasons, we find it inappropriate to resolve this
issue.
In Greene-Thapedi v. Commissioner, 126 T.C. 1 (2006), we
held that the Court lacks refund jurisdiction in section 6330(d)
cases, noting that “we do not believe we should assume, without
explicit statutory authority, jurisdiction either to determine
an overpayment or to order a refund or credit of taxes paid”.
Id. at 11. Our holding in that case is directed towards the
taxpayer’s claim for refund for the same year placed in dispute
in connection with the Commissioner’s proposed collection action.
Because we lack jurisdiction in a section 6330(d) case to
determine a taxpayer’s entitlement to a refund for a year over
which we have jurisdiction, we question whether we are empowered
to determine a taxpayer’s entitlement to a refund for a year over
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which we have no jurisdiction.5 That question, however, need not
be resolved in this proceeding.
Even if the parties agreed that petitioner was entitled to a
refund for 1990, she would be in no position to demand that the
refund be applied to her outstanding 1991 tax liability. If on
her 1990 return she designated the overpayment to be applied to
her 1991 “estimated tax”, because of her outstanding tax
liabilities for other years respondent was not and is not bound
by that election. See sec. 301.6402-3(a)(5) and (6), Proced. &
Admin. Regs. On the other hand, if petitioner elected to have
the overpayment of tax shown on that return refunded, that
election is irrevocable. See sec. 301.6402-3(d), Proced. &
Admin. Regs.
If petitioner believes that she is entitled to a refund for
overpaid 1990 Federal income tax, then she should exercise
whatever rights she has to pursue her claim for that refund
independent of this proceeding. See, e.g., sec. 7422.
Except as discussed, petitioner does not otherwise challenge
the existence or the amount of the underlying liability that
respondent proposes to collect by levy. Neither does she suggest
5
Although not controlling here, see sec. 6214(b), which
provides that the “Tax Court in redetermining a deficiency of
income tax for any taxable year * * * shall consider such facts
with relation to taxes for other years * * * as may be necessary
correctly to redetermine the amount of such deficiency, but in so
doing shall have no jurisdiction to determine whether or not the
tax for any other year * * * has been overpaid or underpaid.”
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that respondent’s determination to do so is in any way an abuse
of discretion. Nothing in the record suggests that the amount of
petitioner’s 1991 tax liability as shown in respondent’s records
has been mistakenly calculated, and nothing in the record
suggests that respondent’s actions in attempting to collect that
liability have failed to comply with the provisions of section
6330.
It follows respondent may proceed with collection as
proposed in the above-mentioned notice of determination.
To reflect the foregoing,
Decision will be entered
for respondent.