*26 On Jan. 24, 2002, the Court entered a decision that there was an overpayment of $ 238,847.24 regarding E's estate tax liability, which amount was paid after the mailing of the notice of deficiency. That decision is now final. R issued refunds to E which were less than the overpayment amount and interest thereon. R alleges that the refund was less than the $ 238,847.24 overpayment and interest thereon because, after our decision became final, and pursuant to
Held: An overpayment means any payment of tax in excess of the tax which is properly due. For purposes of determining the amount of an overpayment, the term "tax" includes any underpayment*27 interest due thereon. Thus, an overpayment by definition is the amount by which payments exceed the tax and interest for the period of underpayment.
Held, further, the amount of the refund should not have been reduced for underpayment interest because that interest was part of the tax amount that was required to be considered in determining the amount of the overpayment. Our final decision that there was a $ 238,847.24 overpayment precludes any remaining unpaid underpayment interest to which Rcould apply the overpayment. Held, further,
*16 OPINION
RUWE, Judge: This matter is before the Court pursuant to the estate's Motion for Proceeding To Enforce Overpayment Determination pursuant to
In 1994, respondent issued a notice of deficiency determining an estate tax deficiency of $ 663,785 and an accuracy-related penalty under
Decedent died on November 16, 1990. The*30 estate filed the estate tax return on July 12, 1991, and included with it a payment of $ 60,164.54, which was the tax liability reported on the return. On March 31, 1998, after our initial decision that there was a deficiency in the amount of $ 564,429.87, the estate remitted a $ 646,325.76 payment (advance payment). Respondent also credited the estate's estate tax liability with a 1992 income tax overpayment of $ 63,052. On May 12, 1998, respondent made a "quick assessment" of estate tax of $ 564,429.87 and deficiency interest thereon of $ 410,848.76.
*17 On January 18, 2002, after our most recent opinion in this case, respondent filed respondent's computation for entry of decision (respondent's computation) along with a proposed decision. Counsel for both parties acknowledged that respondent's computation was in accordance with our opinion in
*32 On January 24, 2002, we entered our decision that there was a $ 238,847.24 overpayment of estate tax paid after the mailing of the notice of deficiency and that there was no penalty due from the estate under
Respondent's computation contained the following documents:
(1) Respondent's computation statement, the pertinent information of which is listed as follows:
| Tax assessed and paid | $ 624,594.41 | |
| Payments: | ||
| July 12, 1991 | $ 60,164.54 | |
| April 15, 1993 | 63,052.00 | |
| March 31, 1998 | 501,377.87 | |
| Total payments | 624,594.41 | |
| Tax liability pursuant to mandate | 385,747.17 | |
| Overpayment | 238,847.24 | |
| Penalty sec. 6662(a) | None |
(2) Form 3614-A, Estate Tax, which recomputed in detail the estate's estate tax liability;
*18 (3) Form 6180, Line Adjustment -- Estate Tax, which recomputed in detail decedent's taxable estate;
(4) a detailed interest calculation which determined the estate's total Federal deficiency interest deduction as $ 209,943.54; and
(5) Form 3623, Statement of Account. For simplicity, *33 the following table is an extraction of the information therein contained:
| Tax | Interest | |
| Revised liability | $ 385,747.17 | |
| Assessment (tax on return) | 60,164.54 | |
| Tax Court assessment (5/12/98) | 564,429.87 | $ 410,848.76 |
| Total assessments | 624,594.41 | |
| Decrease) in assessment | (238,847.24) | |
| Revised liability | 385,747.17 | |
| Payments Payment with | 60,164.54 | |
| return (7/12/91) | ||
| Credit transfer 1992 (4/15/93) | 63,052.00 | |
| Advance payment | 501,377.87 | 144,947.89 |
| (3/31/98) n.1 | ||
| Total payments | 624,594.41 | |
| (Overpayment) | (238,847.24) |
n.1 Advance payment totaling $ 646,325.76 received on Mar. 31, 1998. Of the total payment, $ 501,377.87 was applied towards the additional tax assessment, and $ 144,947.89 was applied towards the additional interest assessment made on May 12, 1998.
The interest referred to in this document is interest on the underpayment of tax that accrued prior to the estate's payment of $ 646,325.76 on March 31, 1998. Hereafter, we refer to interest accrued during that period as "underpayment interest". See
On May 6, 2002, after our final decision, respondent abated $ 180,564.04 of the previously assessed underpayment interest and $ 238,847.24 of the previously assessed estate tax. On May 13, 2002, respondent issued to the estate a refund check of $ 210,467.35, consisting of a $ 153,510.41 refund for overpayment of estate tax and $ 56,956.94 in interest on that refunded amount. Respondent computed the $ 153,510.41 portion of the refund by subtracting $ 85,336.83 from the $ 238,847.24 overpayment amount in our final decision. According to respondent, the $ 85,336.83 was the amount of assessed but unpaid underpayment interest. On October 6, 2003, respondent abated $ 20,341.20 in underpayment*19 interest. On October 6, 2003, respondent refunded $ 30,108.47 to the estate. 4
*35
DiscussionIn its motion, the estate argues that the amount refunded by respondent, $ 210,467.35 ($ 153,510.41 in overpaid estate taxes and $ 56,956.94 in interest on that amount) was incorrect. It is the estate's position that since this Court entered a decision that there was a $ 238,847.24 overpayment, it is this amount, plus interest thereon, which should be refunded to the estate. Accordingly, the estate seeks $ 85,336.83, the difference between $ 238,847.24 and $ 153,510.41, plus interest thereon. 5 We ordered respondent to respond to the motion.
In response, respondent argues that at the time the Court's decision became final, the estate owed assessed and unpaid underpayment interest of $ 85,336.83. Respondent acknowledges that the estate's total payments exceed both the tax and interest regarding the estate tax liability but bases*36 his argument on the allocations of the payments that respondent made between tax and interest. Respondent argues that he had originally, before the final decision, assessed underpayment interest in the amount of $ 410,848.76 and allocated $ 144,947.89 (from the $ 646,325.76, March 31, 1998, advance payment) to that underpayment interest. On the basis of the final decision, respondent explains that he abated $ 180,564.04 in underpayment interest. Thus, after all respondent's allocations and abatements, respondent alleges that $ 85,336.83 in underpayment interest remained unpaid. Respondent states that he subtracted this amount from the $ 238,847.24 overpayment that we determined, and he applied the $ 85,336.83 to assessed but unpaid interest pursuant *20 to
The parties stipulated that our decision, that the estate had an overpayment of $ 238,847.24, was in accordance with our opinion in
The Code does not have an all-inclusive definition of an "overpayment".
we read the word "overpayment" in its usual sense, as meaning any payment in excess of that which is properly due. Such an excess payment may be traced to an error in mathematics*39 or in judgment or in interpretation of facts or law. And the error may be committed by the taxpayer or by the revenue agents. Whatever the reason, the payment of more than is rightfully due is what characterizes an overpayment.
See also
("The commonsense interpretation is that a tax is overpaid when a taxpayer pays more than is owed, for whatever reason or no reason at all.");
The Code generally treats underpayment interest as tax.
(1) Interest treated as tax. -- Interest prescribed under this section on any tax shall be paid upon notice and demand, and shall be assessed, collected, and paid in the same manner as taxes. Any reference in this title (except subchapter B of chapter 63, relating to deficiency procedures) to any tax imposed by this title shall be deemed also to refer to interest imposed by this section on such tax. [Emphasis added.]
*42
*43
See
Consistent with
See also
*45
*46 Respondent makes no argument in this case that underpayment interest is not an appropriate factor to be considered in determining an overpayment of tax. Indeed, respondent's own regulations provide:
there can be no overpayment of tax until the entire tax liability has been satisfied. Therefore, the dates of overpayment of any tax are the date of payment of the first amount which (when added to previous payments) is in excess of the tax liability (including any interest, addition to the tax, or additional amount) * * * [
This regulation provides two examples of assessments, payments, and resulting overpayments. The second example in
In*48 order to determine whether or not an overpayment exists, we must first determine the proper amount of tax. 15 In light of the above-cited cases and
*49
2.
In his response, respondent explains that the estate's refund is less than the $ 238,847.24 overpayment amount, because
(a) General Rule. -- In the case of any overpayment, the Secretary, within the applicable period of limitations, may credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue*50 tax on the part of the person who made*26 the overpayment and shall, subject to subsections (c), (d), and (e) refund any balance to such person.
Respondent cites only
(4) Denial of jurisdiction regarding certain credits and reductions. -- The Tax Court shall have no jurisdiction under this subsection to restrain or review any credit or reduction made by the Secretary under
We do not think that
(2) Jurisdiction to enforce. -- If, after 120 days after a decision of the Tax Court has become final, the Secretary has failed to refund the overpayment determined by the Tax Court, together with the interest thereon as provided by subchapter B of chapter 67, then the Tax Court, upon motion by the taxpayer, shall have jurisdiction to order the refund of such overpayment and interest. * * *
Were we to allow respondent to reduce the refund of an overpayment by*52 an amount that should have already been factored into determining the amount of the overpayment, we*27 would, in effect, be allowing respondent to disregard the amount of the overpayment in our final decision. That would do violence to the definition of the term "overpayment" and ignore the binding nature of our final decision. Our decision was clear: the estate overpaid its estate tax by $ 238,847.24. Respondent's position that he is reducing the refund of the overpayment by the amount of assessed but unpaid underpayment interest simply fails to recognize that underpayment interest is part of the calculation that must be made in arriving at the amount of an overpayment.
We hold that we have jurisdiction over the estate's motion under
*53
3. FinalityA prerequisite to filing a motion pursuant to
We recently discussed the standards for vacating a final decision in
*56
It is suggested that the result of our opinion is inequitable and hands the estate a windfall. However, the fact that our overpayment decision in this case was appealed, affirmed, and has become final, deprives us, and any other court, of jurisdiction to modify the final decision that there was an overpayment of $ 238,847.24. 20 This rule of finality can result*57 *29 in either the taxpayer's or the Commissioner's receiving a benefit that would not have been available had a mistake been corrected before a decision became final. 21
*58
This Court applies equitable principles in deciding the amount of a deficiency, see
In a Tax Court proceeding, either party is free to raise equity-based defenses to the assertions of the other party, and the Court, insofar as it has jurisdiction over the main claim, is free to entertain those defenses.
However, as previously explained, *59 once the decision in this case specifying the amount of the overpayment became final, we lost jurisdiction to modify our decision that there was an overpayment of $ 238,847.24. 22
*60 *30 We have consistently held that we do not have equitable power to expand our jurisdiction. As we stated in
An historical analysis of our cases discloses numerous instances where we have applied equitable principles in deciding issues over which we had jurisdiction. For example, we have applied the equity-based principles of waiver, duty of consistency, estoppel, substantial compliance, abuse of discretion, laches, and the tax benefit rule. "While we cannot expand our jurisdiction through equitable principles, we can apply equitable principles in the disposition of cases that come within our jurisdiction."
*61
When a Tax Court decision becomes final and there is no jurisdiction in any other Federal Court, the Internal Revenue Service (IRS) does not shy away from arguing that lack of jurisdiction trumps equity. For example, in
*31 A distinction that has jurisdiction as its central concept is not meaningless. In Bull, the executor sought equitable recoupment of the estate tax in an action for refund of income tax, over which it was undisputed that the Court of Claims had jurisdiction. See n. 4, supra. All that was at issue was whether the Court of Claims, in the interests of equity, could adjust the income tax owed to the Government to take account of an estate tax paid in error but which the executor could not recover in a separate refund action. Here, Dalm does not seek to invoke equitable recoupment in determining her income tax liability; she has already litigated that liability [in the Tax Court] without raising a claim of equitable recoupment and is foreclosed from relitigating it now. See
Here, as in Dalm, our decision has become final. As*63 a result, neither we nor any other court has jurisdiction to modify the decision.
We hold that the estate is entitled to a refund of the $ 238,847.24 overpayment, plus interest on the overpayment, 24 less any amounts that respondent has previously refunded with respect to the $ 238,847.24 overpayment. Accordingly, we shall grant the estate's motion.
An appropriate order granting the estate's motion for proceeding to enforce overpayment determination will be entered.Reviewed by the Court.
COHEN, SWIFT, WELLS, HALPERN, CHIECHI, and VASQUEZ, JJ., agree with this majority opinion. FOLEY and MARVEL, JJ., concur in result only.
LARO, J., concurring: I disagree with the implication in this Court's Opinion that this Court is powerless to relieve a litigant of a final decision upon a proper showing made in connection with*64 a motion subject to the principles of
A. Motions in this Court To Vacate or Revise a Decision
Motions in this Court to vacate or revise a decision are covered by
Because
(a) Clerical Mistakes. Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party and after such notice, if any, as the court orders. *66 During the pendency of an appeal, such mistakes may be so corrected before the appeal is docketed in the appellate court, and thereafter while the appeal is pending may be so corrected with leave of the appellate court.
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, Etc. On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under
Although
Pursuant to
The roots of this Court, the United States Tax Court, are traced to the
The predecessors to this Court were not courts of law, and they did not possess the judicial powers of a District Court. As independent agencies in the Executive Branch, this Court's predecessors had only those powers which were conferred upon them by the Executive Branch, powers which included no incidental principles of equity.
C. Relevant Jurisprudence Concerning the Authority of This Court's Predecessors To Apply
The vast preponderance of judicial jurisprudence compels the conclusion that this Court's predecessors had little, if any, power to vacate a decision that had become "final" under
Counsel for the Commissioner here stands to the petition [to vacate the decision] if it can be lawfully granted, but as in duty bound contends that the Board after four years cannot vacate its order, especially since
Whereas the Courts of Appeals for the Ninth Circuit stated in
*77
D. 1969 ActThe 1969 Act made this Court the functional equivalent of a District Court. See
In
F. *79 This Court Has Equitable Powers That Its Predecessors Did Not
Following Freytag v. Commissioner, supra, many Courts of Appeals now agree that this Court has equitable powers that this Court's predecessors did not have and that this Court's powers are harmonious with the powers of a District Court. In
includes the authority to apply the full range of equitable principles generally granted to courts that possess judicial powers. Even if the Tax Court does not have far-reaching general equitable powers [a statement that presumably was made in reply to the Supreme Court's dictum in
The Court of Appeals for the Seventh Circuit stated similarly in
*81
G. Ability of This Court To Apply the Principles of
Here, no one disputes that we had jurisdiction to redetermine the estate tax deficiency that was at issue. If one of the parties in this case were now to make a motion subject to the principles of
Although it is true that this Court is a court of limited jurisdiction, so are all other Federal courts. All Federal courts possess only that power authorized by Constitution and statute and may not expand that power by judicial decree.
This Court's application of rule
The Michaelses cannot credibly argue that the error in the 1995 decision was anything other than a clerical mistake. They are forced, therefore, to argue that the Tax Court in this case simply should not be allowed to exercise a power analogous to that afforded the district courts by
In addition, the Tax Court's power to correct clerical errors does*84 not conflict with the statutory framework establishing finality for that court's decisions. The Michaelses point out that the substance of a decision becomes final and unappealable once the statutory period for filing an appeal has expired. But the same is largely true of district court decisions, subject to such extraordinary remedies as those contained in
I am not unmindful of this Court's opinions in
Nor does my opinion*86 change on account of any other case that was decided before Freytag v. Commissioner, supra. As I see it, the relevant cases as to the current powers of this Court are those cases that pertain to this Court's status as an
more than 2 decades have passed since the 1977 decision in
The Court's Opinion on pages 23-24 quotes
If the Tax Court lacked authority to entertain a claim of equitable estoppel, taxpayers with such a claim would no longer have a choice of fora for their tax issues. They would effectively be forced*90 to pay their taxes and sue for a refund, submitting all of their claims to the district courts. Taxpayers would then be barred by res judicata from relitigating a claim in the Tax Court. Thus, taxpayers would essentially be denied the right to challenge deficiencies in the Tax Court if they wanted to assert an equitable estoppel claim. This would be an unfair choice to pose to taxpayers, and would undermine the purpose of the Tax Court. We therefore conclude that the Tax Court did have jurisdiction over the Bokums' equitable estoppel claim. [
Accord
*91 VASQUEZ and GALE, JJ., agree with this concurring opinion.
THORNTON, J., concurring: The majority opinion holds that this Court's previous decision as to the amount of the estate tax overpayment necessarily incorporated the estate's liability for certain underpayment interest that had already been assessed (and had not been abated). I agree with this holding, as confined to its facts. Inasmuch as the facts of this case do not present any issue as to the treatment of unassessed underpayment interest in the calculation of an overpayment, I do not believe that the majority opinion should be construed as resolving that issue.
Background
Certain procedural facts, not discussed in the majority opinion, are important for understanding how the underpayment interest in question had come to be assessed before this Court entered its decision as to the overpayment.
On June 4, 1997, we issued our original opinion in the instant case. See
*92 On March 31, 1998, the estate paid $ 646,325.76, comprised of a portion of the estate tax deficiency and an estimate of underpayment interest. 2 On April 10, 1998, the estate filed a timely notice of appeal with the Court of Appeals for the Fifth Circuit. The estate did not, however, file bond, as generally required to stay assessment or collection of the deficiency during appellate review. See
*93 On December 15, 1999, the Court of Appeals for the Fifth Circuit reversed, vacated, and remanded our original decision for further proceedings with respect to the estate tax deficiency. See
On April 3, 2000, the estate filed a motion to restrain collection, abate assessment, and refund amounts collected by respondent. In
On November 21, 2001, pursuant to the remand from the Court of Appeals for the Fifth Circuit, we issued another opinion in this case, again sustaining respondent's determination of an estate tax deficiency. 3
On May 6, 2002, respondent abated $ 180,564.04 of the previously assessed underpayment interest and $ 238,847.24 of the previously assessed estate tax. On May 13, 2002, respondent issued to the estate a refund check of $ 210,467.35, consisting of a $ 153,510.41 refund for overpayment of estate tax and $ 56,956.94 in interest on that refunded amount. Respondent computed the $ 153,510.41 portion of the refund by subtracting $ 85,336.83 from the $ 238,847.24 overpayment amount in our final decision. 4
*95 On November 7, 2002, the Court of Appeals for the Fifth Circuit affirmed our second decision in Estate of Smith and entered judgment against the estate.
In summary, to make a long story short: when this Court entered its decision as to the amount of the overpayment in question, the estate had a liability for assessed and unpaid underpayment interest. In computing the estate's overpayment, respondent omitted this liability. Respondent now argues that he is entitled to reduce the estate's overpayment to compensate for this omission. The majority opinion rejects respondent's argument and grants the estate's motion to enforce our overpayment determination.
Inclusion of Assessed Interest in Overpayment*96 Determination
Insofar as it addresses the treatment of assessed underpayment interest, the majority opinion is a logical extension of
More fundamentally, the majority opinion is a natural application of the widely accepted definition of an overpayment as "any payment in excess of that which is properly due."
I agree with the majority opinion that
Moreover, in enforcing our decision of an overpayment under
Inasmuch as the underpayment interest in question had already been computed and assessed when we entered our overpayment decision, there is no compelling practical reason why the underpayment interest should not have been included in the overpayment calculation. Indeed, in computing*99 the estate's estate tax liability, respondent had allowed the underpayment interest as a
Confining the Majority Opinion Holding to Its Facts
Properly confined to its procedural and factual context, then, and notwithstanding some rather open-ended language in the majority opinion, its holding is that the assessed underpayment interest in question should have been taken into account in calculating the amount of the estate's overpayment. I do not believe the majority opinion should be construed as deciding issues beyond those actually presented by the facts of this case. In particular, I do not believe the majority opinion should be construed as deciding the proper treatment of unassessed interest in the calculation of an overpayment. The resolution of that more difficult issue should await a case that squarely presents it.
GERBER, LARO, and GALE, JJ., agree with this concurring opinion.
GOEKE, J., dissenting: The opinion adopted today*100 reaches an unjust result, reasoning that the principle of finality requires that result. The estate and respondent entered into agreed
It is obvious from the computations that the separate treatment of interest and tax was not an accident. Included in the parties' agreed computations is the following information:
| Total interest due | $ 209,943.54 n.1 |
| Interest paid | -$ 144,947.89 |
| Interest not paid for which the | |
| estate was given a deduction | $ 64,995.65 |
n.1 The amount of total interest due was determined*101 in reference to the estate's tax liability of $ 385,747.17.
The estate is provided an interest deduction for interest on its estate tax deficiency in the agreed computations, but the overpayment computation does not take into account that interest. As a result, the Court's opinion allows the estate to receive a deduction for the amount of interest due, $ 209,943.54, having paid interest of only $ 144,947.89, and the adopted opinion orders respondent to forgo offsetting the overpayment refund by the outstanding interest liability, which as a result will never be collected. Rather than inadvertence, the overpayment computation was the result of the parties' adherence to a longstanding practice, followed by parties in many of our cases, to submit agreed computations of overpayments without interest. The adopted opinion ignores the parties' agreed overpayment computations to reach an incorrect and unjust result.
Indeed, the result reached by the adopted opinion is contrary to both statutory law and our Rules of Practice and Procedure (Rules). This is the first instance where this Court has asserted the jurisdiction to overturn the Commissioner's offset of an overpayment pursuant*102 to
I. Basis of the Adopted Opinion
The foundation of the adopted opinion is that
*105 The report's only citation regarding the
The statutory scheme, contrary to the assumptions of the adopted opinion, is based on a chronology that places the resolution of unpaid interest on a deficiency after the entry of decision. "Unpaid" in this context means unaccounted for by the Commissioner or not treated as paid by the Commissioner. *106 The period of limitations for the assessment of interest provides an initial example of the fallacy in the adopted opinion that
The analysis of the adopted opinion is also inconsistent with the statutory provisions permitting the parties to net interest obligations where there is an overlapping period when interest and/or tax has been underpaid and overpaid for different tax liabilities.
If Congress had intended that our*108 overpayment decisions under
If the Tax Court determines under this subsection that the taxpayer has made an overpayment of interest or that the Secretary has made an underpayment of interest, then that determination shall be treated under
Reliance upon
"Interest may be part of an overpayment if the interest accrued and was paid prior to the*110 time the overpayment was claimed or arose. This is the type of interest we are considering in this case."
Under the concurring analysis, it is suggested that the adopted opinion should be limited to assessed interest. My view is that there is no support in the statutory language for such a distinction. In the present case, although interest was assessed, it*111 was interest on the liability before our first opinion was reversed and remanded ($ 410,000), not the correct amount based upon our revised opinion ($ 209,943.54, less the payment of $ 144,947.89, leaving an unpaid balance of $ 64,995.65). The prior interest assessment in this case does not reflect the actual interest liability due and owing. When it was assessed, this interest was beyond our jurisdiction because the case was in a deficiency situation. Our authority to address this unpaid assessment of interest is now limited to
V.
The present issue originates with this Court's execution of the decision document in question. The opinion was based on a computation which the parties agreed was in conformity with this Court's opinion after remand pursuant to
The estate represented to the Court that the computation submitted was in conformity with the Court's opinion and the estate also represented that the interest in the amount of $ 64,995.65 was deductible, explicitly acknowledging that such interest would be paid by offset against the overpayment of tax shown in the agreed
*113 This Court should hold the estate to its stipulation under
As Judge Laro explains, this Court has the authority of a court of law. We can implement that authority to fill in gaps in our Rules pursuant to
I believe we have exceeded our statutory authority today, but perhaps the most unfortunate aspect of today's opinion is that
For the stated reasons, I respectfully dissent.
HAINES, WHERRY, KROUPA, and HOLMES, JJ., agree with this dissenting opinion.
HOLMES, J., dissenting: I fully agree with the detailed analysis of Judge Goeke's lucid dissent. *115 I write separately only to provide a brief introduction to what has become -- unnecessarily in my view -- a very complicated statutory analysis by focusing on what I see as three fundamental mistakes that the majority makes today.
The first lies on page 9 of the Court's opinion, where it states that what we are deciding is "whether the amount of an 'overpayment' must include consideration of any underpayment interest owed by a taxpayer at the time of the overpayment calculation." (Emphasis added.) What follows is the statutory interpretation that Judge Goeke analyzes. However, I don't think this is the right question. What we should be reviewing here is neither a term used in the Code nor a regulation, but only a term used in an agreed computation under
Most cases that we partly decide in a taxpayer's favor require computing exactly how much is owed by whom for the tax years in question. This computation is nothing more than a complicated math problem, and one we leave for the parties themselves to figure out. "If the parties are in agreement as to the amount of the deficiency or overpayment to be entered as the decision * * *, then they, or either of them, shall file*116 promptly with the Court * * * a computation showing the amount of the deficiency, liability, or overpayment and that there is no disagreement that the figures shown are in accordance with the findings and conclusions of the Court."
That's what the estate and the Commissioner did here. Counsel for the estate signed the agreed decision documents based on the agreed computations, aware that the line item marked "overpayment" did not reflect unpaid interest. This is not surprising:
In*117 this case, the estate, through counsel, had the opportunity to review the statement of account that the Commissioner prepared. This document clearly shows that interest and tax were to be considered and treated separately, that "overpayment" meant overpayment of tax only and "interest" included only interest assessed after the Court's initial deficiency determination. The estate's counsel agreed to this terminology and should not now be allowed to prevail on a claim that the terms as used in this agreement have different meanings. This Court typically treats closing agreements, stipulations of fact, and settlements as contracts, holding parties to their terms.
*118 The majority doesn't dispute that the parties' computation under
And this points to the second shortcoming in the majority's opinion -- its focus on
The third and final*121 issue I wish to highlight is the majority's seeming indifference to the effects of today's decision on a large number of third parties. As Judge Goeke points out, today's definition of "overpayment" threatens to bollix up the procedure for interest calculations by forcing parties to calculate interest before submitting their computations under
Because there is no reason to let this happen, I respectfully dissent.
HAINES, GOEKE, WHERRY, and KROUPA, JJ., agree with this dissenting opinion.
Footnotes
1. Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure, and all section references are to the Internal Revenue Code.↩
2. See
Estate of Smith v. Commissioner, 108 T.C. 412">108 T.C. 412 (1997);Estate of Smith v. Commissioner, 12">110 T.C. 12 (1998);Estate of Smith v. Commissioner, 198 F.3d 515">198 F.3d 515 , 526 (5th Cir. 1999);Estate of Smith v. Commissioner, 115 T.C. 342">115 T.C. 342 , 348-49 (2000);Estate of Smith v. Commissioner, T.C. Memo. 2001-303 ;Estate of Smith v. Commissioner, 54 Fed. Appx. 413↩ (5th Cir. 2002) .3. The agreed computations were prepared pursuant to
Rule 155(a) , which states:Where the Court has filed or stated its opinion determining the issues in a case, it may withhold entry of its decision for the purpose of permitting the parties to submit computations pursuant to the Court's determination of the issues, showing the correct amount of the deficiency, liability, or overpayment to be entered as the decision. If the parties are in agreement as to the amount of the deficiency or overpayment to be entered as the decision pursuant to the findings and conclusions of the Court, then they, or either of them, shall file promptly with the Court an original and two copies of a computation showing the amount of the deficiency, liability, or overpayment and that here is no disagreement that the figures shown are in accordance with the findings and conclusions of the Court. In the case of an overpayment, the computation shall also include the amount and date of each payment made by the petitioner. The Court will then enter its decision.↩
4. Respondent alleges that this represented a $ 20,341.20 underpayment interest abatement and $ 9,767.27 in interest thereon. According to respondent, he initially applied the 1992 income tax overpayment to the estate's estate tax deficiency as of Mar. 15, 1996, but the correct date was Apr. 15, 1993. In his response to the estate's motion, respondent explains:
This amount was abated as a result of applying the $ 63,052 income tax overpayment credit to the correct date (April 15,1993). This amount, plus interest of $ 9,767.27, was refunded to petitioner on October 6, 2003.
* * * * * * *
Until October 6, 2003, the credit was incorrectly applied effective March 15, 1996.↩
5. In its motion, the estate refers to $ 85,337.83. However, it is clear that the estate made a mathematical error, and the correct figure is $ 85,336↩.83.
6.
Sec. 6512(b)(1) provides:SEC. 6512(b) . Overpayment Determined by Tax Court. --(1) Jurisdiction to determine. -- Except as provided by paragraph (3) and by
section 7463 , if the Tax Court finds that there is no deficiency and further finds that the taxpayer has made an overpayment of income tax for the same taxable year, of gift tax for the same calendar year or calendar quarter, of estate tax in respect of the taxable estate of the same decedent, or of tax imposed by chapter 41, 42, 43, or 44 with respect to any act (or failure to act) to which such petition relates for the same taxable period, in respect of which the Secretary determined the deficiency, or finds that there is a deficiency but that the taxpayer has made an overpayment of such tax, the Tax Court shall have jurisdiction to determine the amount of such overpayment, and such amount shall, when the decision of the Tax Court has become final, be credited or refunded to the taxpayer. If a notice of appeal in respect of the decision of the Tax Court is filed undersection 7483 ↩, the Secretary is authorized to refund or credit the overpayment determined by the Tax Court to the extent the overpayment is not contested on appeal.7. As we have previously stated:
Overpayment jurisdiction depends on whether we have jurisdiction to find that "there is no deficiency" or "that there is a deficiency."
Barton v. Commissioner, 97 T.C. 548, 552 (1991) . Respondent has issued a notice of deficiency containing a determination that petitioner is liable for deficiencies in income tax for 1988 through 1991. Petitioner filed a timely petition. Therefore, we have jurisdiction and are required to find that there either is or is not a deficiency for each of the years 1988 through 1991.Estate of Baumgardner v. Commissioner, 85 T.C. 445, 448 (1985) . It follows that we also have jurisdiction to determine whether petitioner has made overpayments of income tax for the same years.Sec. 6512(b) ;Barton v. Commissioner, supra at 552 . [Winn-Dixie Stores v. Commissioner, 110 T.C. 291">110 T.C. 291 , 295↩ (1998).]8. The only reference to "overpayment" in subch. B of ch. 63 is in
sec. 6214(e) ) which provides: "For provision giving Tax Court jurisdiction to order a refund of an overpayment and to award sanctions, seesection 6512(b)(2)↩ ."9. In
Estate of Baumgardner v. Commissioner, 85 T.C. 445, 452↩ (1985) , we stated: "Interest may be part of an overpayment if the interest accrued and was paid prior to the time the overpayment was claimed or arose."10. The Chief Counsel's National Office has acknowledged in field service advice that:
As explained in
Winn-Dixie Stores, Inc. v. Commissioner, 110 T.C. 291">110 T.C. 291 (1998), the Tax Court has jurisdiction to determine overpayments of income tax.I.R.C. section 6512(b) . BecauseI.R.C. section 6601(e)(1) provides that interest shall be treated as a tax, an overpayment of tax includes any interest that is part of such overpayment. The statutory exception inI.R.C. section 6601(a) [sic] that excludes interest as a tax for purposes of determining a deficiency underI.R.C. section 6211(a) does not apply to overpayments. As long as the Service has determined a deficiency in tax for the years at issue, the Tax Court has jurisdiction to determine an overpayment of tax, including interest, for those years.Estate of Baumgardner, 85 T.C. 445 (1986) . [Field Serv. Adv. 199924017, Field Serv. Adv. 199924017, 1999 FSA LEXIS 70 (June 18, 1999) .]In
Field Service Advice 200001003 (Jan. 7, 2000), 1999 FSA LEXIS 248 , the Chief Counsel's National Office explained:Code
section 6512(b) defines the Tax Court's jurisdiction to determine overpayments. In general, the court has jurisdiction to determine the amount of an overpayment in income tax for a taxable year where it finds "that there is no deficiency and further finds that the taxpayer has made an overpayment of income tax for the same taxable year," or where the court finds "there is a deficiency but that the taxpayer has made an overpayment of such tax." Id.,section 6512(b)(1) . Further, in determining whether X Corp has overpaid its taxes, the court has jurisdiction to determine whether X Corp overpaid interest by virtue of its entitlement to a zero interest rate on underpayments for the years before the court.Winn-Dixie Stores, Inc. v. Commissioner↩, 110 T.C. 291 (1998) . * * *11. See
Goettee v. Commissioner, T.C. Memo. 2003-43 , where we observed:Section 6512(b) provides, inter alia, that if a taxpayer properly invokes our overpayment jurisdiction under ssection 6512(b) , then we have jurisdiction to determine the amount of the taxpayer's overpayment. This jurisdiction undersection 6512 also permits us to redetermine a taxpayer's statutory interest.Lincir v. Commissioner, 115 T.C. 293, 298 (2000) , affd.32 Fed. Appx. 278 (9th Cir. 2002) ; seeZfass v. Commissioner, 118 F.3d 184">118 F.3d 184 , 192 n. 9 (4th Cir. 1997), affg.T.C. Memo. 1996-167↩ .12. The Chief Counsel's National Office addressed the meaning of the term "overpayment" and our overpayment jurisdiction to determine underpayment interest in field service advice:
The [Tax] Court does have jurisdiction to consider alleged overpayments of underpayment interest as part of its overpayment jurisdiction. Such excessive interest, once assessed and paid, becomes part of an overpayment, i. e., a payment in excess of that which is properly due.
Jones v. Liberty Glass Co., 332 U.S. 524">332 U.S. 524 , 531, 92 L. Ed. 142">92 L. Ed. 142, 68 S. Ct. 229">68 S. Ct. 229, 1 C.B. 102">1948-1 C.B. 102(1947);Baumgardner v. Commissioner, 85 T.C. 445 (1985) . At the time of the overpayment, previous payments of tax and previous payments of interest merge to become the refundable amount of the overpayment, regardless of their previous designation as tax or interest.Baumgardner, at 457-58 ; see alsosection 6601(e)(1) ;Alexander Proudfoot Co. v. United States, 454 F.2d 1379">454 F.2d 1379 , 1383 (1972) ("deficiency interest . . . has been deemed an integral part of the tax");Barton v. Commissioner, 97 T.C. 548 (1991) (Tax Court has jurisdiction to consider overpayment of interest under formersection 6621(c) even though it does not have jurisdiction over a proposed determination of yet-to-be assessed and paid underpayment interest).* * * * * * *
Thus, in
Winn-Dixie Stores, Inc. v. Commissioner, 110 T.C. 291 (1998) , the court held that it had jurisdiction to consider the effect of the Service's failure to honor the taxpayer's request that the Service credit overpayments of tax from other tax years against the proposed liabilities before the court because such crediting would have reduced the amount of underpayment interest due from the taxpayer on the deficiencies. Critical to the Court's exercise of jurisdiction was the taxpayer's payment of the tax plus the underpayment interest determined by the Service before the taxpayer asked the court to determine an overpayment of tax, including underpayment interest..Field Serv. Adv. 200012049, 1999 FSA LEXIS 336↩ (Mar. 24, 2000) 13. The estate cites this regulation in its motion. In respondent's response to the motion, respondent neither cites to nor argues against the applicability of this regulation. In
Estate of Baumgardner v. Commissioner, 85 T.C. at 451-452 , we cited the aforementioned regulation in support of our jurisdiction to consider underpayment interest as part of our overpayment jurisdiction. In the 19 years following our Baumgardner↩ opinion, the Commissioner has not modified this regulatory definition of an "overpayment".14. The Chief Counsel's National Office echoes this position in field service advice: "Although payments of underpayment interest are not considered in determining a deficiency, they can be weighed in determining whether an overpayment exists."
Field Serv. Adv. 200012049 (Mar. 24, 2000↩ ).15. We have held that in making an overpayment determination, the tax which is "properly due" is the correct amount of tax, regardless of whether the correct tax has been or could be assessed at the time of our decision. See
Bachner v. Commissioner, 109 T.C. 125 (1997) , affd. without published opinion172 F.3d 859 (3d Cir. 1998) , where we found there was no overpayment of the taxpayer's proper tax even though the statute of limitations barred assessment of that tax for the year in issue. We relied on the holding inLewis v. Reynolds, 284 U.S. 281">284 U.S. 281 , 283, 76 L. Ed. 293">76 L. Ed. 293, 52 S. Ct. 145">52 S. Ct. 145, 1932 C.B. 130">1932 C.B. 130 (1932), wherein the Court stated:An overpayment must appear before refund is authorized. Although the statute of limitations may have barred the assessment and collection of any additional sum, it does not obliterate the right of the United States to retain payments already received when they do not exceed the amount which might have been properly assessed and demanded.
Bachner was decided on remand from the Court of Appeals for the Third Circuit, which had held that the question of whether there was an overpayment was an issue that was independent of whether there was a deficiency.
Bachner v. Commissioner, 81 F.3d 1274">81 F.3d 1274 , 1279↩ (3d Cir. 1996).16. In field service advice, the Chief Counsel's National Office states:
At the time of the overpayment, previous payments of tax and previous payments of interest merge to become the refundable amount of the overpayment, regardless of their previous designation as tax or interest. [
Field Serv. Adv. 200012049 (Mar. 24, 2000).↩ ]17. In an opinion issued before the enactment of
sec. 6512(b)(4) , the Court of Appeals for the Second Circuit observed:These provisions [regarding our deficiency jurisdiction], taken together with
section 6512(b)(1) , authorize the Tax Court definitively to determine the amount of any deficiency and overpayment for a taxable year brought before it by a taxpayer petition, and provide for the court to take into account any priorsection 6402(a) application of that overpayment as a credit envisioned bysection 6512(b)(1) , but militate strongly against an interpretation that a priorsection 6402(a) application of the overpayment divests the Tax Court of jurisdiction to perform itssection 6512(b)(1) obligation to determine the amount of the overpayment. * * * [Belloff v. Commissioner, 996 F.2d 607">996 F.2d 607 , 613 (2d Cir. 1993), affg.T.C. Memo. 1991-350↩ .]18. In
Cinema '84 v. Commissioner, 122 T.C. No. 13, 122 T.C. 264 (2004) , we noted that the Court of Appeals for the Sixth Circuit had previously held that a final decision of the Tax Court could be vacated in situations involving mutual mistake, seeReo Motors, Inc. v. Commissioner, 219 F.2d 610 (6th Cir. 1955) , but that in a more recent case,Harbold v. Commissioner, 51 F.3d 618">51 F.3d 618 , 622 (6th Cir. 1995), the Court of Appeals for the Sixth Circuit held that Reo Motors, Inc. was overruled by the Supreme Court inLasky v. Commissioner, 352 U.S. 1027">352 U.S. 1027 , 1 L. Ed. 2d 598">1 L. Ed. 2d 598, 77 S. Ct. 594">77 S. Ct. 594↩ (1957), and that the Court would no longer follow the rationale of Reo Motors, Inc.19. In
Stamm International Corp. v. Commissioner, 90 T.C. 315 (1988) , the Commissioner sought relief from a settlement agreement because "the computations for entry of decisions" resulted in less than the Commissioner expected due to his miscalculations.Id. at 320 . In denying the Commissioner's motion, we noted that the considerations involved in whether to grant relief from the settlement agreement were "akin to those involved in vacating a judgment entered by consent. In such cases, the parties are held to their agreement without regard to whether the judgment is correct on the merits."Id.↩ at 322 .20.
Sec. 6512(a) generally deprives any other court from taking jurisdiction to determine an overpayment if the taxpayer has filed a petition in the Tax Court. The origin ofsec. 6512(a) , as applied to estate taxes, issec. 319(a) of the Revenue Act of 1926, ch. 27, 44 Stat. (Part 2) . S. Rept. 52, 69th Cong., 1st Sess. (1926),1939-1 C. B. (Part 2) 332, 351 , explains the reasons for the enactment ofsec. 319(a) of the Revenue Act of 1926 as follows:But if he [taxpayer] does elect to file a petition with the Board his entire tax liability for the year in question (except in case of fraud) is finally and completely settled by the decision of the Board when it has become final, whether the decision is by findings of fact and opinion, or by dismissal, as in case of lack of prosecution, insufficiency of evidence to sustain the petition, or on the taxpayer's own motion. The duty of the Commissioner to assess the deficiency thus determined is mandatory, and no matter how meritorious a claim for abatement of the assessment or for refund he can not entertain it, nor can suit be maintained against the United States or the collector. Finality is the end sought to be attained by these provisions of the bill, and the committee is convinced that to allow the reopening of the question of the tax for the year involved either by the taxpayer or by the Commissioner (save in the sole case of fraud) would be highly undesirable.
See
Estate of Bailly v. Commissioner, 81 T.C. 949">81 T.C. 949 , 955↩ n. 10 (1983).21. For a discussion of the hardships that can result from the rules governing finality, see
Estate of Bailly v. Commissioner↩, supra .22.
Sec. 7481(c) allows only a taxpayer (not the Commissioner) to file a motion for the redetermination of interest under certain circumstances. The estate's motion before us is based onsec. 6512(b) . Respondent makes no argument thatsec. 7481(c) has any relevance to the estate's motion. Indeed, the 1997 legislative history regardingsec. 7481(c) specifically states:In clarifying the Tax Court's jurisdiction over interest determinations, the conferees do not intend to limit any other remedies that taxpayers may currently have with respect to such determinations, including in particular refund proceedings relating solely to the amount of interest due. [H. Conf. Rept. 105-220, at 733 (1997),
1997-4 C.B. (Vol. 2) 1457, 2203 .]A proceeding under
sec. 6512(b) is one of the "other remedies" that taxpayers had. In field service advice, the Chief Counsel's National Office has recognized thatthe Tax Court has jurisdiction under
sec. 6512(b) to consider alleged overpayments of underpayment interest and that: the Tax Court has auxiliary jurisdiction undersection 7481(c) to determine whether the taxpayer has made an overpayment of interest or the Service has underpaid interest based upon a deficiency or overpayment decision entered by the court * * * [Field Serv. Adv. 200012049 (Mar. 24, 2000)↩ ; emphasis added.]23. In
Commissioner v. McCoy, 484 U.S. 3">484 U.S. 3 , 6, 98 L. Ed. 2d 2">98 L. Ed. 2d 2, 108 S. Ct. 217">108 S. Ct. 217↩ (1987), the Supreme Court held that in an appeal of a Tax Court decision, the appellate court's authority was restricted to review those matters over which the Tax Court had jurisdiction and that the Court of Appeals could not expand its own jurisdiction because the Court of Appeals believed it was necessary "in order to achieve a fair and just result."24. Interest on "overpayments" is provided for by
sec. 6611↩ .1. Unless otherwise indicated, section references are to the applicable versions of the Internal Revenue Code.↩
2. Relief from a judgment because of clerical mistake is governed by
paragraph (a) of rule 60 .West Virginia Oil & Gas Co. v. George E. Breece Lumber Co.,.213 F.2d 702">213 F.2d 702 , 705 (5th Cir. 1954); see alsoMichaels v. Commissioner, 144 F.3d 495">144 F.3d 495 (7th Cir. 1998), affg.T.C. Memo. 1995-294↩ .3.
Helvering v. Northern Coal Co. , 293 U.S. 191">293 U.S. 191 , 79 L. Ed. 281">79 L. Ed. 281, 55 S. Ct. 3">55 S. Ct. 3 (1934), concerned four cases which had arisen in the Board. On Oct. 23, 1933, the Supreme Court had affirmed judgments entered as to those cases and, on Nov. 20, 1933, had denied petitions for rehearing as to three of those judgments. Following the Court's issuance on Nov. 29, 1933, of the mandates as to the four cases, additional petitions for rehearing were filed on May 21, 1934. In denying these additional petitions, the Court noted that the applicable predecessor tosec. 7481(a)(3) provided that "The decision of the board shall become final * * * Upon the expiration of thirty days from the date of issuance of the mandate of the Supreme Court, if such court directs that the decision of the board be affirmed or the petition for review dismissed."Id. at 192 . The Court held that the "authoritative and explicit requirement of the statute" precluded it from rehearing its decision; i. e., the additional petitions for rehearing were filed after the time limits set forth in the statute. Id.R. Simpson & Co. v. Commissioner, 321 U.S. 225">321 U.S. 225 , 88 L. Ed. 688">88 L. Ed. 688, 64 S. Ct. 496">64 S. Ct. 496 (1944), also arose in the Board. After the Supreme Court on Nov. 9, 1942, had denied the taxpayer's petition for certiorari as to a decision that had affirmed the Board, and after the 25-day period in the Court's rules for the filing of a petition for rehearing of that denial had expired, the taxpayer petitioned the Court for a rehearing. The Court dismissed that petition for want of jurisdiction. The Court noted that the applicable predecessor ofsec. 7481(a)(2)(B) provided that "The decision of the Tax Court [the predecessor to this Court] shall become final * * * Upon the denial of a petition for certiorari, if the decision of the Tax Court has been affirmed".Id.↩ at 227 . The Court held that this statute deprived it of jurisdiction upon its denial of the petition for certiorari and that "denial" under the statute occurred when the Court's denial of certiorari was final under its rules; i. e., upon the expiration of the 25-day period allowed for requesting reconsideration.4. In
Harbold v. Commissioner, 51 F.3d 618">51 F.3d 618 , 622 (6th Cir. 1995), the Court of Appeals for the Sixth Circuit stated that it would no longer followReo Motors, Inc. v. Commissioner, 219 F.2d 610 (6th Cir. 1955), in that, it concluded, that case had been overruled byLasky v. Commissioner, 352 U.S. 1027">352 U.S. 1027 , 1 L. Ed. 2d 598">1 L. Ed. 2d 598, 77 S. Ct. 594">77 S. Ct. 594↩ (1957).5. That dictum, when taken in context, is not remarkable. Nor is it inconsistent with my view that this Court has district courtlike equitable powers. The context of this dictum indicates that the Supreme Court was merely noting the well-settled rule that no court of law may ignore the express intent of Congress as to the imposition of interest and penalties. See
Commissioner v. McCoy, 484 U.S. 3, 7 (1987) ; see alsoFlight Attendants Against UAL Offset v. Commissioner, 165 F.3d 572, 578 (7th Cir. 1999) ("In context, the Supreme Court's dictum inCommissioner v. McCoy, 484 U.S. 3, 7, 98 L. Ed. 2d 2, 108 S. Ct. 217 (1987) (per curiam), that the Tax Court lacks "general equitable powers" means only that the Tax Court is not empowered to override statutory limits on its power by forgiving interest and penalties that Congress has imposed for nonpayment of taxes -- but then no court is, unless the imposition would be unconstitutional."). In fact, the Court made no mention of McCoy when it decidedFreytag v. Commissioner, 501 U.S. 868 (1991) ,4 ↩ years later.6. I note in particular
Continental Equities, Inc. v. Commissioner, 551 F.2d 74">551 F.2d 74 (5th Cir. 1977), revg. on grounds not relevant hereinT.C. Memo. 1974-189↩ . There, the Court of Appeals for the Fifth Circuit held that this Court had no authority to apply the doctrine of equitable recoupment. We recently stated as to that decision:7. The rule drawn from this trilogy of Supreme Court cases is that a request for review by that Court in a civil case must be timely filed within an applicable period prescribed by Congress and that the untimely filing of such a request deprives the Court of jurisdiction. See
FEC v. NRA Political Victory Fund, 513 U.S. 88">513 U.S. 88 , 90, 130 L. Ed. 2d 439">130 L. Ed. 2d 439, 115 S. Ct. 537">115 S.Ct. 537 (1994);Missouri v. Jenkins, 495 U.S. 33">495 U.S. 33 , 45, 109 L. Ed. 2d 31">109 L. Ed. 2d 31, 110 S. Ct. 1651">110 S. Ct. 1651 (1990). The rule, of course, is different when a Federal trial court applies the principles ofrule 60(b)↩ within the time limits set forth therein.1. Pursuant to our original opinion, the parties submitted separate computations of the estate tax deficiency under
Rule 155 . On Jan. 12, 1998, we issued a supplemental opinion resolving a disagreement between the parties with respect to their computations. SeeEstate of Smith v. Commissioner, 12">110 T.C. 12↩ (1998).2. Respondent's Appeals Office estimated the amount of interest on the then "underpayment" of estate tax. In conjunction with this estimate, respondent allowed a deduction from the gross estate for estimated interest which would be due on the deficiency, determined as of a hypothetical payment date of Mar. 31, 1998. ↩
3. Ultimately, the parties agreed that the estate tax liability pursuant to the mandate was $ 385,747.17. Respondent's computations submitted under
Rule 155 ↩ considered this amount in calculating the estate's overpayment.4. According to respondent, the $ 85,336.83 amount was the amount of assessed but unpaid underpayment interest. On Oct. 6, 2003, respondent made an additional abatement of $ 20,341.20 in underpayment interest and refunded $ 30,108.47 to the estate.↩
5. For example, assume a simple hypothetical: The taxpayer makes payments of $ 100,000, has a tax liability of $ 80,000 (exclusive of interest), and owes assessed underpayment interest of $ 30,000. I believe this taxpayer has a $ 10,000 underpayment, rather than a $ 20,000 overpayment (as would be indicated if the assessed interest were omitted from the calculation).
1.
Sec. 6402(a) was first added to the Internal Revenue Code of 1939 atsec. 3770(a)(4) by the , and was moved tosec. 6402 by theInternal Revenue Code of 1954, ch. 736, 68 Stat. 730">68 Stat. 730 . It has been amended by theInternal Revenue Service Restructuring and Reform Act of 1998, Pub. L. 105-206, secs. 3505 and3711(c)(1), 112 Stat. 771">112 Stat. 771 , 781;Balanced Budget Act of 1997, Pub. L. 105-33, sec. 5514(a)(1), 111 Stat. 620">111 Stat. 620 ;Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104-193, sec. 110(1)(7)(A), 110 Stat. 2173">110 Stat. 2173 ;Deficit Reduction Act of 1984, Pub. L. 98-369, sec. 2653(b)(2), 98 Stat. 1155">98 Stat. 1155 ;Omnibus Budget Reconciliation Act of 1981, Pub. L. 97-35, sec. 2331(c)(1), 95 Stat. 861">95 Stat. 861 ; andTax Reform Act of 1976, Pub. L. 94-455, sec. 1906(b)(13)(A) (K), 90 Stat. 1834">90 Stat. 1834↩ .2. There are no briefs on this issue, and the estate's motion is unclear at best.↩
1. As Judge Goeke↩ convincingly demonstrates, the parties so obviously agreed what the term meant that respondent allowed the estate a deduction for the accrued but unpaid interest that was shown in the computation
2. The majority likewise relies on regulation
Sec. 301.6611-1(b)↩ , Proced. & Admin. Regs., as additional support for its conclusion that "overpayment" must mean "the amount by which payments exceed the tax, including any underpayment interest." See majority op. pp. 18-19. But that regulation defines overpayment for the purpose of computing interest, not drafting settlement documents.