DocketNumber: Docket No. 27807-90
Judges: CHABOT
Filed Date: 7/6/1993
Status: Non-Precedential
Modified Date: 11/20/2020
*293 H and W overpaid their Federal income taxes for 1986 and 1987 through withholding. H and W's period for filing their 1986 income tax return was extended until Oct. 15, 1987. R mailed notices of deficiency to W for 1986 and 1987 on Sept. 19, 1990. R mailed notices of deficiency to H for 1986 and 1987 on Nov. 14, 1990. H and W filed joint income tax returns for 1986 and 1987 on or about Apr. 10, 1992.
MEMORANDUM OPINION
CHABOT, Additions to Tax Deficiency Sec. 6651(a) Sec. 6653 Sec. 6653 Sec. 6654(a) (a)(1)(A) (a)(1)(B) 1986 $ 3,226 $ 806.50 $ 161.30 $ 156 1987 9,801 1,433.25 490.05 255
Respondent determined deficiencies in Federal individual income*295 tax and additions to tax under sections 6651(a) (failure to file timely), 6653(a)(1) (negligence, etc.), and 6654 (underpayment of estimated tax) against Ann Watson Anderson (hereinafter sometimes referred to as Ann) as follows:
Additions to Tax | |||||
Deficiency | Sec. 6651(a) | Sec. 6653 | Sec. 6653 | Sec. 6654(a) | |
(a)(1)(A) | (a)(1)(B) | ||||
1986 | $ 4,611 | $ 863.25 | $ 230.55 | $ 153 | |
1987 | 5,628 | 1,112.75 | 281.40 | -- |
After concessions by both sides, *296 the issue for decision is whether petitioners are barred by the time limitations under
The instant case was submitted fully stipulated; the stipulations and stipulated exhibits are incorporated herein by this reference.
When the petition was filed in the instant case, petitioners lived in Vienna, Virginia.
In 1986 Federal individual income taxes were withheld from petitioners' income in the amount of $ 7,538.29 (Vernon -- $ 6,380.29; Ann -- $ 1,158). In 1987 Federal individual income taxes were withheld from petitioners' income in the amount of $ 5,245.76 (Vernon -- $ 4,068; Ann -- $ 1,177 (rounded)). Petitioners did not make any other payments of Federal individual income taxes for 1986 or 1987. Petitioners had extensions of time to file their 1986 tax return until October 15, 1987. Petitioners did not timely file their 1986 or 1987 tax returns.
On September 19, 1990, respondent mailed to Ann a notice of deficiency for 1986 and a notice of deficiency for 1987. On November 14, 1990, respondent mailed to Vernon a notice of deficiency for 1986 and a notice of deficiency for 1987. On December 12, 1990, petitioners filed a petition with this Court. On February 7, 1991, respondent filed an answer.
Petitioners did not file a claim for credit*298 or refund for either 1986 or 1987 before September 19, 1990, or before November 14, 1990. Petitioners filed joint income tax returns with respondent for 1986 and for 1987 on or about April 10, 1992. *299 they are overwithheld in the amount of $ 4,021.46. B. Analysis
Petitioners' 1986 and 1987 taxes were paid more than 2 years before respondent mailed the notices of deficiency to them (Sept. 19, 1990, and Nov. 14, 1990).
Petitioners contend that they are entitled to a determination of overpayments of their 1986 and 1987 Federal income taxes. Petitioners ask that the overpayment for 1986 be credited against their taxes for 1987, and that their overpayment for 1987 be credited against their taxes for 1988. Respondent contends that petitioners are not entitled to a*300 determination of overpayments because of the time limitations of
We agree with respondent.
within the period which would be applicable under
We conclude from the foregoing that petitioners are not entitled*306 to a determination from this Court that they have an overpayment that can be credited or refunded. This conclusion is consistent with a long line of Tax Court precedents, among the most recent of which are
Petitioners contend that "adequate reasons" existed to justify their late filings. They contend that their 1986 tax return was late because their S corporation was unable to provide them with certain records which they needed to prepare their individual tax returns. Petitioners also contend that their reliance on respondent's advice caused them to file their tax returns later than they otherwise would have done. They contend that, while their file was being transferred from respondent's Memphis office to respondent's Philadelphia office, respondent's Memphis office advised them to ignore certain of respondent's notices.
Petitioners cite
Petitioners make other contentions in regard to whether
The result of a statute of limitations bar on credit or refund may seem harsh in view of an actual overpayment, e.g.,
We conclude that petitioners are not entitled to a determination that they have an overpayment of 1986 or 1987 income taxes. To take account of concessions by respondent,
1. Unless indicated otherwise, all section references are to sections of the Internal Revenue Code of 1986 as in effect for the years in issue; references to
1. 50 percent of the interst under sec. 6601 on $ 3,226 for 1986 and on $ 5,733 for 1987.↩
1. 50 percent of the interest under sec. 6601 on $ 3,453 for 1986 and on $ 4,451 for 1987. ↩
2. The parties agree that petitioners (1) have joint income tax deficiencies of $ 94 for 1986 and $ 1,166 for 1987; (2) are liable for additions to tax under sec. 6653(a)(1)(A) for 1986 and 1987 in the amounts of $ 4.70 and $ 58.30, respectively, see sec. 6653(c)(1); and (3) are not liable for additions to tax under secs. 6651(a), 6653(a)(1)(B), and 6654. Respondent's sec. 6651(a) concession preceded this Court's opinion in
3. Initially, petitioners did not intend to claim overpayments or, at least, not refunds of overpayments. The pleadings do not reflect this issue. See Rule 39. During the stipulation process, the parties agreed that petitioners' tax liabilities for 1986 and 1987 were substantially less than the amounts that had been withheld from petitioners' income in 1986 and 1987. During hearings held before this Court on Mar. 31, 1992, and Apr. 1, 1992, both sides discussed the issue of the claimed overpayments, and the statute of limitations bar. On brief, both sides focus on the statute of limitations issues under
Also, as we have noted,
Unless indicated otherwise, all Rule references are to the Tax Court Rules of Practice and Procedure.↩
4. Petitioners may file joint income tax returns after the notices of deficiency have been mailed.
5. The overwithholding for each year is calculated by adding the negligence addition,
6.
(a) Period of Limitation on Filing Claim. -- Claim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer 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. * * * (b) Limitation on Allowance of Credits and Refunds. -- (1) Filing of claim within prescribed period. -- No credit or refund shall be allowed or made after the expiration of the period of limitation prescribed in subsection (a) for the filing of a claim for credit or refund, unless a claim for credit or refund is filed by the taxpayer within such period. (2) Limit on amount of credit or refund. -- (A) Limit where claim filed within 3-year period. -- If the claim was filed by the taxpayer during the 3-year period prescribed in subsection (a), the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return. * * * (B) Limit where claim not filed within 3-year period. -- If the claim was not filed within such 3-year period, the amount of the credit or refund shall not exceed the portion of the tax paid during the 2 years immediately preceding the filing of the claim. (C) Limit if no claim filed. -- If no claim was filed, the credit or refund shall not exceed the amount which would be allowable under subparagraph (A) or (B), as the case may be, if claim was filed on the date the credit or refund is allowed.↩
7.
(a) Effect of Petition to Tax Court. -- If the Secretary has mailed to the taxpayer a notice of deficiency under (1) As to overpayments determined by a decision of the Tax Court which has become final; * * * * * * (b) Overpayment Determined by Tax Court. -- (1) Jurisdiction to determine. -- Except as provided by paragraph (3) and by * * * (3) Limit on amount of credit or refund. -- No such credit or refund shall be allowed or made of any portion of the tax unless the Tax Court determines as part of its decision that such portion was paid -- * * * (B) within the period which would be applicable under
8. Many prior opinions refer to
9.
10. At the hearing when the instant case was submitted, the Court informed petitioners that it was irrelevant, for purposes of the instant case, whether they were claiming a credit as distinguished from a refund.↩
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