T.C. Memo. 2008-261
UNITED STATES TAX COURT
RICHARD A. PERKINS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 14587-06L. Filed November 20, 2008.
Richard A. Perkins, pro se.
Christopher J. Sheldon, for respondent.
MEMORANDUM OPINION
JACOBS, Judge: On April 16, 2008, this Court rendered a
Memorandum Opinion, Perkins v. Commissioner, T.C. Memo. 2008-103
(Perkins I), in which we decided that respondent’s proposed
enforcement action to collect by levy assessments for additions
to tax and interest for 1995 and 2000 against petitioner could
not proceed. We remanded the matter to respondent’s Appeals
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Office for reconsideration as to if and when petitioner was
financially disabled for purposes of section 6511(h).1
Background
Petitioner resided in Arizona when he filed his petition.
Petitioner and his wife belatedly filed joint returns for
1995 and 2000 on which they reported tax of $4,219 and $5,892,
respectively. Respondent assessed additions to tax and interest
with respect to the tax shown on each return.
Petitioner filed a joint return for 1999 on February 26,
2004. That return showed, and respondent does not dispute, that
petitioner overpaid his 1999 tax liability by $1,922. All of
petitioner’s 1999 tax payments were made through withholding
credits.
Petitioner argued that he should be permitted to apply the
1999 overpayment to amounts owed for 1995 and 2000. The central
dispute in Perkins I, as well as herein, was whether petitioner
timely filed a claim for a refund of his 1999 Federal income tax
overpayment. Because petitioner filed that claim on February 26,
2004, it would generally be barred by the section 6511 period of
limitations. Petitioner claimed the statute was tolled, and the
section 6511 period of limitations did not bar his claim for
1
All section references are to the Internal Revenue Code as
amended.
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refund of his 1999 overpayment, because he was “financially
disabled” within the meaning of section 6511(h).
In Perkins I we found that respondent’s Appeals settlement
officer misapprehended the applicable law in considering whether
petitioner was financially disabled, and thus we remanded the
case to respondent’s Appeals Office for reconsideration. The
remand necessitated our preventing respondent from proceeding
with his proposed enforced collection action until respondent’s
Appeals settlement officer could reconsider petitioner’s claim
that he was financially disabled.
Pursuant to our order to remand, on July 18, 2008, one of
respondent’s Appeals settlement officers met with petitioner to
discuss the issue of tolling the statute of limitations pursuant
to section 6511(h). She provided petitioner with the applicable
guidelines, found in Rev. Proc. 99-21, 1999-1 C.B. 960, to be
used in deciding whether a taxpayer is financially disabled.
Petitioner agreed to attempt to obtain the documentation required
under the guidelines to substantiate his financial disability
claim. When respondent did not receive the relevant
documentation, respondent issued a supplemental notice of
determination on September 26, 2008, in which respondent
concluded that petitioner was not financially disabled within the
meaning of section 6511(h). Consequently, respondent denied
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petitioner’s claim to have his overpayment for 1999 applied to
offset his tax liability for 1995 and 2000.
Discussion
In Perkins I we described the statutory framework regarding
enforced collection activity by the Secretary. Petitioner’s sole
argument as to the procedures that have been employed thus far is
that respondent’s proposed levy should not proceed because
petitioner’s 1999 overpayment is available to offset his 1995 and
2000 tax liabilities.
As we noted in Perkins I:
As directed by section 6511(h), the Commissioner has
prescribed guidelines that are to be used in deciding
whether a taxpayer is financially disabled. According to
Rev. Proc. 99-21, sec. 4, 1999-1 C.B. 960, 960, the taxpayer
must provide a physician’s written statement that includes:
(1) The name and description of the taxpayer’s physical or
mental impairment, (2) the physician’s medical opinion that
the impairment prevented the taxpayer from managing his
financial affairs, (3) the physician’s medical opinion that
the impairment was or can be expected to result in death, or
lasted or can be expected to last for 12 months or more, and
(4) the specific time period during which the taxpayer was
prevented by such physical or mental impairment from
managing the taxpayer’s financial affairs.15 The
physician’s statements must be submitted with the credit or
refund claim. Id.
15
Additionally, the taxpayer must certify than no
person, including the taxpayer’s spouse, was authorized to
act on behalf of the taxpayer in financial matters during
the relevant period. [See sec. 6511(h)(2)(B).]
The criteria for an individual’s financial disability, as set
forth in Rev. Proc. 99-21, supra, are drawn directly from the
text of section 6511(h)(2)(A), and that statute mandates that
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proof of the existence of an individual’s financial impairment be
furnished in the form or manner as the Secretary may require.
Following remand of this case to respondent’s Appeals
Office, petitioner attempted to obtain a physician’s written
statement as described in Rev. Proc. 99-21, supra. To this end,
petitioner wrote to a psychiatrist at Saint Vincent Behavioral
Health Clinic (Saint Vincent’s) who had treated petitioner for
mental health difficulties, asking the psychiatrist to provide
the required statement. In a subsequent telephone conversation
with petitioner, the psychiatrist stated, according to
petitioner, that the psychiatrist’s “diagnosis and treatment of
[petitioner] was so long ago he would have to rely on what was
written in [petitioner’s] medical record, which should be
sufficient, and would not be able to add anything.”
Petitioner’s medical record, including detailed notes
compiled by a therapist and a psychiatrist at Saint Vincent’s,
was submitted at the trial of this case. Respondent objected to
the admission of the notes into evidence as well as petitioner’s
testimony concerning his medical history. We need not decide
whether the evidence is admissible, because we find that it is
insufficient to establish that petitioner was financially
disabled within the meaning of section 6511(h).
Nowhere in petitioner’s medical record is there any
statement by a physician to the effect that petitioner was
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incapable of managing his financial affairs, or that he suffered
from an impairment that could be expected to result in death (or
had lasted or could be expected to last for 12 months or more),
or that any specific period was associated with such impairment.
On the contrary, petitioner testified that from 2000 through 2003
he earned significant amounts of income working for the same
employer and during those years he paid bills, entered into lease
agreements together with his wife, and was “predominantly in
charge of the household finances.”
Petitioner has not shown that he was financially disabled
for purposes of section 6511(h). Consequently, the section 6511
period of limitations with respect to petitioner’s refund claim
for tax year 1999 was not suspended, and the period of
limitations with respect to petitioner’s refund claim expired.
Because petitioner’s 1999 overpayment is not available to
offset his 1995 and 2000 tax liabilities, respondent may proceed
to collect by levy additions to tax and interest petitioner owes
for 1995 and 2000.
To reflect the foregoing,
Decision will be entered
for respondent.