Michael J. Golden ( 2023 )

United States Tax Court
T.C. Memo. 2023-103MICHAEL J. GOLDEN,
Petitioner
v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent
—————
Docket No. 13348-21. Filed August 10, 2023.
—————
Michael J. Golden, pro se.
Ryan A. Ault and Amanda K. Bartmann, for respondent.
MEMORANDUM OPINION
LAUBER, Judge: Petitioner did not timely file a Federal income
tax return for 2015. The Internal Revenue Service (IRS or respondent)
prepared a substitute for return (SFR) and, on April 5, 2021, issued
petitioner a notice of deficiency determining a deficiency of $2,981 plus
additions to tax under section 6651(a)(1) and (2). 1 Shortly thereafter,
petitioner filed a return for 2015, reporting an overpayment and
claiming a refund. Having examined that return, respondent agrees that
petitioner is liable for no deficiency or additions to tax for 2015. But
respondent contends that any refund of overpaid tax is barred by
statute.
The parties have filed Cross-Motions for Summary Judgment on
this question. See Rule 121. Finding no disputes of material fact, we
1 Unless otherwise indicated, statutory references are to the Internal Revenue
Code, Title 26 U.S.C., in effect at all relevant times, and Rule references are to the Tax
Court Rules of Practice and Procedure. We round all monetary amounts to the nearest
dollar.
Served 08/10/23
2
[*2] conclude that refund of petitioner’s overpayment is barred by
sections 6511(b)(2)(B) and 6512(b)(3)(B). We will accordingly grant
respondent’s Motion and deny petitioner’s Cross-Motion.
Background
The following facts are derived from the parties’ pleadings and
Motion papers, including the attached Exhibits. See Rule 121(c).
Petitioner resided in Pennsylvania when he petitioned this Court.
Petitioner did not timely file a Federal income tax return for 2015.
As authorized by section 6020(b), the IRS prepared an SFR on the basis
of third-party reporting and, on April 5, 2021, issued him a notice of
deficiency. That notice determined that petitioner for 2015 had adjusted
gross income of $160,585, of which $147,748 consisted of wages.
Allowing him the standard deduction of $6,300 and a personal
exemption of $4,000, the IRS determined taxable income of $150,285
and a tax liability of $35,150. Against that sum the IRS applied a credit
of $32,169 for tax withheld by his employers, yielding a net tax liability
of $2,981. The notice also determined additions to tax for failure to
timely file and pay. See § 6651(a)(1) and (2).
On April 19, 2021, shortly after he received the notice of
deficiency, petitioner filed a return for 2015. This return reported
(among other things) itemized deductions of $38,187, a tax liability of
$26,617, and an overpayment of $5,552. Petitioner timely petitioned
this Court, seeking redetermination of his deficiency and contending
that he was entitled to a refund.
After the case was docketed, it was sent to the IRS Independent
Office of Appeals (Appeals) for consideration of possible settlement. On
the basis of information petitioner supplied, the Appeals officer assigned
to his case calculated that his correct tax liability for 2015 was $25,904.
Applying the withholding credit of $32,169, the Appeals officer
concluded that petitioner had overpaid his 2015 tax by $6,265.
Given Appeals’ conclusion that petitioner overpaid his 2015 tax,
respondent concedes that petitioner does not owe the deficiency or the
additions to tax determined in the notice of deficiency. Petitioner
likewise does not dispute the IRS’s calculation of his overpayment
amount. However, the parties disagree about whether petitioner is
entitled to a refund of his overpayment.
3
[*3] On February 16, 2023, respondent filed a Motion for Summary
Judgment seeking a ruling that sections 6511(b)(2)(B) and 6512(b)(3)(B)
bar refund of petitioner’s $6,265 overpayment. On March 19, 2023,
petitioner filed a Cross-Motion for Summary Judgment. Petitioner does
not dispute respondent’s recitation of the relevant facts or his analysis
of these statutory provisions. But petitioner advances equitable
arguments as to why he is nonetheless entitled to a refund.
Discussion
A. Summary Judgment
The purpose of summary judgment is to expedite litigation and
avoid costly, unnecessary, and time-consuming trials. See FPL Grp.,
Inc. & Subs. v. Commissioner, 116 T.C. 73, 74 (2001). We may grant
summary judgment when there is no genuine dispute as to any material
fact and a decision may be rendered as a matter of law. Rule 121(a)(2);
Sundstrand Corp. v. Commissioner, 98 T.C. 518, 520 (1992), aff’d, 17
F.3d 965 (7th Cir. 1994). Petitioner has alleged no genuine dispute of
material fact affecting the question that respondent has proposed for
summary judgment. We therefore conclude that this question may be
adjudicated summarily.
B. Analysis
The Tax Court is a court of limited jurisdiction and may exercise
its jurisdiction only to the extent authorized by statute. See § 7442;
Sunoco Inc. & Subs. v. Commissioner, 663 F.3d 181, 187 (3d Cir. 2011),
vacating 122 T.C. 88 (2004). We are authorized to redetermine the
amount of a deficiency for a taxable period for which the Commissioner
has issued a notice of deficiency and the taxpayer has timely petitioned
for review. See §§ 6212–6214; Rule 13(a); Monge v. Commissioner, 93
T.C. 22, 27 (1989). It is not the existence of a deficiency, but rather the
Commissioner’s determination of a deficiency, that provides a predicate
for our jurisdiction. Hannan v. Commissioner, 52 T.C. 787, 791 (1969).
In this case, although respondent has conceded a zero deficiency, his
timely issuance of a notice of deficiency and petitioner’s timely filing of
the Petition are sufficient to sustain our authority to decide the case. 2
2 Section 6213(a) provides that a taxpayer located in the United States may file
a petition with the Tax Court for redetermination of the deficiency within 90 days of
the mailing of the notice of deficiency. Absent stipulation to the contrary, appeal of
4
[*4] We also have jurisdiction to determine the amount of any
overpayment a taxpayer made for a year that is properly before the
Court on a petition to redetermine a deficiency. See § 6512(b)(1). Our
jurisdiction to order a refund of an overpayment, however, is limited and
depends upon when the tax was paid. We may determine a refund for
an overpayment of tax paid within one of two applicable look-back
periods. Those two periods are (1) the two-year period before the IRS
issued the notice of deficiency, or (2) the three-year period before the
taxpayer filed his return. See §§ 6511(b)(2)(A) and (B), 6512(b)(3)(B);
Commissioner v. Lundy, 516 U.S. 235, 241–42 (1996); Gussie v.
Commissioner, T.C. Memo. 2001-302, 82 T.C.M. (CCH) 906, 908–09. If
the taxpayer failed to file a return before the notice of deficiency was
issued, the two-year look-back period applies. See §§ 6511(b)(2)(B),
6512(b)(3); Commissioner v. Lundy, 516 U.S. at 243; Gussie, 82 T.C.M.
(CCH) at 909. 3
In this case the two-year look-back period applies because
petitioner failed to file a 2015 return before April 5, 2021, the date the
IRS issued the notice of deficiency. Therefore, we have jurisdiction to
determine a refund only if petitioner paid the tax of which refund is
sought within two years of April 5, 2021. Petitioner’s tax payments for
tax year 2015, totaling $32,169, consisted entirely of withholding from
his wages. Under section 6513(b)(1), income tax deducted and withheld
from an employee’s wages is deemed to have been paid on April 15 of the
following tax year—in petitioner’s case, April 15, 2016. Because this
date was almost five years (and thus more than two years) before the
date on which the notice of deficiency was issued, we lack jurisdiction to
determine a refund of petitioner’s overpayment.
Without disputing respondent’s characterization of the pertinent
law and facts, petitioner asks the Court to give equitable consideration
to his personal circumstances. He represents that he was unable to
this case would apparently lie to the U.S. Court of Appeals for the Third Circuit. See
§ 7482(b)(1)(A). The Third Circuit recently held that the 90-day deadline is a
nonjurisdictional claims-processing rule subject to equitable tolling. See Culp v.
Commissioner, No. 22-1789, 2023 WL 4612024 (3d Cir. July 19, 2023). Neither party
in this case disputes that the Petition was timely filed.
3 Section 6512(b)(3) (last sentence) provides that the look-back period will be
three years where the notice of deficiency was issued during the third year after the
due date of the return (with extensions) but where no such return was filed. Because
the notice of deficiency in this case was issued in 2021, more than three years after the
due date of petitioner’s 2015 tax return, section 6512(b)(3) does not operate to extend
the look-back period to three years.
5
[*5] timely file his 2015 return because of the “double load” placed upon
him while he was working simultaneously as a program manager in the
civilian sector and as a senior military officer in the United States Navy
Reserve. These burdens evidently made his life “extremely difficult.”
He asks that the statutory limitations on his refund be waived, adding
his belief that it was not Congress’s intent to “punish . . . loyal and law-
bidding [sic] citizens” like him.
We sympathize with petitioner’s predicament. But section
6512(b)(3) sets forth a jurisdictional requirement that limits our power
as a court. See § 6512(b)(1) (providing that “the Tax Court shall have
jurisdiction to determine the amount of [an] overpayment” if specified
conditions are met); Commissioner v. Lundy, 516 U.S. at 245; Harlan v.
Commissioner, 116 T.C. 31, 32 n.2 (2001); Krape v. Commissioner, T.C.
Memo. 2007-125, 93 T.C.M. (CCH) 1239, 1240. “Jurisdictional
requirements . . . do not allow for equitable exceptions.” Boechler, P.C.
v. Commissioner, 142 S. Ct. 1493, 1497 (2022). And we may not assume
jurisdiction upon equitable considerations. See Wise Guys Holdings,
LLC v. Commissioner, 140 T.C. 193, 199 (2013); Bennett v.
Commissioner, T.C. Memo. 2017-243, 114 T.C.M. (CCH) 628 (declining
to apply equitable principles to assume jurisdiction in a section 6512(b)
case).
The Supreme Court has made clear that the limitations on
refunds of overpayments prescribed in section 6512(b)(3) shall be given
effect, consistent with Congress’s intent as expressed in the plain text of
the statute, regardless of any perceived harshness to the taxpayer. See
Commissioner v. Lundy, 516 U.S. at 250–53. Because Congress has not
given us authority to award refunds based solely on equitable factors,
we are compelled to grant respondent’s Motion for Summary Judgment.
To reflect the foregoing,
An appropriate order and decision will be entered.