T.C. Summary Opinion 2011-137
UNITED STATES TAX COURT
ABDELRAHMAN RABIE, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 2390-10S. Filed December 12, 2011.
Abdelrahman Rabie, pro se.
Timothy B. Heavner, for respondent.
DEAN, Special Trial Judge: This case was heard pursuant to
the provisions of section 7463 of the Internal Revenue Code in
effect when the petition was filed. Pursuant to section 7463(b),
the decision to be entered is not reviewable by any other court,
and this opinion shall not be treated as precedent for any other
case. Unless otherwise indicated, subsequent section references
are to the Internal Revenue Code in effect for the year at issue,
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and Rule references are to the Tax Court Rules of Practice and
Procedure.
Respondent determined a deficiency in petitioner’s Federal
income tax of $11,987 for 2005. Respondent also determined for
2005 an addition to tax for failure to file timely under section
6651(a)(1) of $395.77 and an addition to tax for failure to pay
timely under section 6651(a)(2) of $351.80.
The parties agree that petitioner has overpaid his Federal
income tax for 2005. After other concessions by the parties, the
only issue for decision is whether petitioner is entitled to a
refund or credit of Federal income tax for 2005.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the exhibits received in evidence
are incorporated herein by reference. Petitioner resided in
Virginia when the petition was filed.
Background
Petitioner requested on an undated Form 4868, Application
for Automatic Extension of Time To File U.S. Individual Income
Tax Return, and was granted an extension of time to file his 2005
Federal income tax return until October 15, 2006. On Form 4868
he estimated his total tax liability for 2005 to be $8,320 and
his total 2005 payments as $10,229. The “Balance due” to the
Internal Revenue Service (IRS), shown on line 6 of the Form 4868,
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should be obtained by subtracting total payments from the total
estimated tax liability. Petitioner wrote “$1,909” on line 6.
Petitioner sent the IRS a letter dated September 23, 2008,
in which he apologized for the “delay” in filing his Federal
income tax returns for 2005 and 2006. He requested in the letter
a further extension of time, until December 31, 2008, to file his
returns and stated that “I had [sic] always received refunds and
I know that it will be the same for the [sic] 2005 and 2006.”
Respondent mailed petitioner the notice of deficiency in
this case on October 26, 2009.
The parties agree that before October 15, 2009, petitioner
made no formal claim for refund on a Form 1040, U.S. Individual
Income Tax Return, or a Form 1040X, Amended U.S. Individual
Income Tax Return, for taxable year 2005. IRS records indicate
that on February 1, 2010, a return for 2005 was filed for
petitioner. On September 20, 2010, petitioner mailed the IRS a
“corrected” return for 2005. The parties agree that with the
“corrected” return petitioner has now filed an accurate Form 1040
for 2005.
Discussion
Generally, the Commissioner’s determinations in a notice of
deficiency are presumed correct, and the taxpayer has the burden
of proving that those determinations are erroneous. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). In some
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cases the burden of proof with respect to relevant factual issues
may shift to the Commissioner under section 7491(a). As there is
no dispute as to a factual issue in this case, section 7491(a) is
not applicable.
A taxpayer seeking a refund of overpaid taxes ordinarily
must file a timely claim for a refund with the IRS that meets the
requirements of section 6511. That section contains two separate
provisions for determining the timeliness of a refund claim: The
taxpayer must file a claim for a refund “within 3 years from the
time the return was filed or 2 years from the time the tax was
paid, whichever of such periods expires the later, or if no
return was filed by the taxpayer, within 2 years from the time
the tax was paid.” Sec. 6511(a)(1).
Section 6511 also defines two “lookback” periods: if the
claim is filed “within 3 years from the time the return was
filed”, then the taxpayer is entitled to a refund of the portion
of the tax paid within the 3 years immediately preceding the
filing of the claim plus the period of any extension of time for
filing the return. Sec. 6511(b)(2)(A). If the claim is not
filed within that 3-year period, then the taxpayer is entitled to
a refund of only that “portion of the tax paid during the 2 years
immediately preceding the filing of the claim.” Sec.
6511(b)(2)(B). If no claim has been filed the refund cannot
exceed the amount that would be allowable under section
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6511(b)(2)(A) or (B) if a claim was filed on the date the refund
is allowed. Sec. 6511(b)(2)(C).
Petitioner argues that either his undated Form 4868 or his
previously described September 23, 2008, letter to respondent was
an informal claim for refund within the prescribed time limits of
section 6511.
The purpose of a claim for refund is to put the Commissioner
on notice that the taxpayer is asserting a right with respect to
an overpayment of tax. Newton v. United States, 143 Ct. Cl. 293,
163 F. Supp. 614, 618 (1958). The Supreme Court has held that a
taxpayer’s notice to the IRS that fairly advises it of the nature
of the taxpayer’s claim which the IRS could reject because it is
too general or because it does not comply with the formal
requirements of the statute and regulations issued thereunder
will still be treated as a claim where the defects and lack of
specificity have been remedied by amendment filed after the lapse
of the statutory period. United States v. Kales, 314 U.S. 186,
194 (1941) (and cases cited thereat).
Each case must be decided on its own facts and circumstances
in determining whether the IRS should have focused attention on
the merits of the “particular dispute” raised by the informal
claim. Angelus Milling Co. v. Commissioner, 325 U.S. 293, 297
(1945). It is not enough, however, that the facts supporting the
claim reach the IRS in some “roundabout” fashion. Id. “The
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evidence should be clear that the Commissioner understood the
specific claim that was made even though there was a departure
from form in its submission.” Id. at 297-298.
In Kaffenberger v. United States, 314 F.3d 944, 955-956 (8th
Cir. 2003), under the peculiar facts of that case, the court held
a Form 4868 satisfied the “written component” requirement of an
informal claim. According to the court in Kaffenberger, the Form
4868, along with the other communications between the taxpayer
and the IRS, provided the Commissioner sufficient notice that the
taxpayer was claiming a credit to be applied to a subsequent
year’s tax liability.
In Khinda v. Commissioner, T.C. Memo. 1994-617, this Court
stated that Form 4868 is based on the information available to
the taxpayer when he sends it in, so that he may obtain an
automatic extension of time in which to file an individual income
tax return. The Form 4868 does not purport to be a claim for
refund, the Court said. And unlike a Form 1040, the Form 4868
does not contain a line on which to enter an amount to be
refunded, only a line on which to indicate the balance due.
The Court finds that, under the facts and circumstances of
this case, the IRS could not have been expected to determine an
overpayment of tax based only on the estimate of petitioner’s
income tax liability provided by him on the Form 4868.
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In United States v. Kales, supra at 194, the taxpayer wrote
to the IRS within the time allowed for filing a claim objecting
to action by the IRS with respect to its determination of an
overvaluation of stock in a previously filed return. She stated
in her letter that if the IRS took the threatened action, she
would show that the stock had been undervalued and she would
claim a right to a refund. When the IRS nevertheless took the
action complained of, the taxpayer filed a formal claim stated to
be an “amendment” of the claim in her letter. The Court found
that the IRS could not have been in doubt “that she was setting
forth her right to a refund in the event” it took the action
about which she complained. Id. at 195. Her letter was
considered an informal claim for refund.
In contrast, in Martin v. United States, 833 F.2d 655 (7th
Cir. 1987), the IRS proposed to determine a deficiency with
respect to a previously filed estate tax return. The estate’s
representative sent the IRS a 37-page protest letter, on the last
page of which there was a demand for a refund of tax. The court
stated that to be considered an adequate informal claim, the
writing must be “sufficient to apprise the IRS that a refund is
sought and to focus attention on the merits of the dispute so
that an examination of the claim may be commenced if the IRS
wishes.” Id. at 660. The court found that the letter did not
qualify as an informal claim because the taxpayer failed to
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specify why a refund was due, the demand was made before the
issue of refund seemed ripe, and it failed to put the IRS on
notice to conduct an administrative review.
Petitioner’s letter of September 23, 2008, asks for
additional time to file his 2005 and 2006 returns and states that
he always receives refunds and he “knows that it will be the
same” for the 2005 and 2006 tax years.
Petitioner’s letter of September 23, 2008, was premature and
unspecific. There was no “dispute” to which the attention of the
IRS could have been drawn. Petitioner himself had not yet
computed his tax liability. In addition, the Court finds that
petitioner’s letter “[failed] to satisfy the most basic
requirement of a claim--advising the Commissioner that a refund
[was] being sought.” See Hollie v. Commissioner, 73 T.C. 1198,
1214 (1980) (and cases cited thereat). The letter stated that
petitioner “had always received refunds” and expresses the
opinion that “it will be the same” for 2005; but a refund was not
requested. The IRS is not required to use circumstantial
evidence or to conduct an independent investigation to determine
whether a taxpayer is asking for a refund.1 Id. at 1215; see also
Kuehn v. United States, 202 Ct. Cl. 473, 480 F.2d 1319, 1322
(1973).
1
Petitioner’s Form 4868 contains no information that would
transform the Sept. 23, 2008, letter into an acceptable informal
claim for refund.
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A taxpayer seeking a refund in this Court, however, does not
need to actually file a claim for refund with the IRS. He need
only show that the tax to be refunded was paid during the
applicable lookback period. Sec. 6512(b). In this case, the
applicable lookback period is set forth in section 6512(b)(3)(B),
which provides that this Court cannot award a refund of any
overpaid taxes unless it first determines that the taxes were
paid “within the period which would be applicable under section
6511(b)(2) * * * if on the date of the mailing of the notice of
deficiency a claim had been filed (whether or not filed) stating
the grounds upon which the Tax Court finds that there is an
overpayment”.
Section 6512(b)(3)(B) treats delinquent filers of income tax
returns less favorably than those who have filed timely. Whereas
timely filers are most likely to have the opportunity to seek a
refund in the event they are drawn into Tax Court litigation, a
delinquent filer’s entitlement to a refund in Tax Court depends
on the date of the mailing of the notice of deficiency.
Commissioner v. Lundy, 516 U.S. 235, 245 (1996). Section
6512(b)(3)(B) directs the Tax Court to measure the lookback
period from the date on which the notice of deficiency is mailed
and not the date on which the taxpayer actually files a claim for
refund. Id. In the case of delinquent filers, section
6512(b)(3)(B) establishes only a 2-year lookback period, so the
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delinquent filer is not assured the opportunity to seek a refund
in this Court. Id. If the notice of deficiency is mailed more
than 2 years after the taxes were paid, the Court lacks
jurisdiction to award the taxpayer a refund. Id.
Neither the amendment of section 6512(b)(3), effective for
tax years that ended after August 5, 1997, nor its legislative
history permits the Court to deviate in this case from the
holding in Commissioner v. Lundy, supra at 245. See Taxpayer
Relief Act of 1997, Pub. L. 105-34, sec. 1282(a) and (b), 111
Stat. 1037-1038; see also, e.g., H. Conf. Rept. 105-220, at 577-
578 (1997), 1997-4 C.B. 1457, 2047-2048. Because the notice of
deficiency was not mailed to petitioner during the third year
after the due date for filing the return, with extension, and no
return was filed before the notice was sent, petitioner is not
entitled to a 3-year lookback period.
Petitioner’s 2005 withheld taxes are deemed to have been
paid on April 15, 2006. See sec. 6513(b)(1). Because the notice
of deficiency was mailed on October 26, 2009, more than 3 years
after deemed payment of the withheld taxes, even the 3-year
lookback period, were it available, would not help petitioner.2
2
Petitioner’s 2005 tax return filed on Feb. 1, 2010, is a
claim for refund but was clearly not filed within 2 years from
the time the tax was paid. See secs. 6511(b)(2)(B), 6513(b)(1).
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The Court sustains respondent’s position that petitioner is
not entitled to a refund of tax paid for 2005. See Commissioner
v. Lundy, supra at 245.
To reflect the foregoing,
Decision will be entered
under Rule 155.