We all know the old saw about a SNOD (statutory notice of deficiency or 90-day letter) being the ticket to the Tax Court. But Jose Diaz and Frances Diaz, Docket No. 22620-13L, filed 8/21/15, remind us, with some help from Judge Gale, that it’s also the ticket to a refund.

Jose and Frances petition from a NOD. That’s nothing special, except that Appeals refused to sustain the NFTL against Jose and Frances. So Jose and Frances won. So why the beef?

Jose and Frances want a refund. IRS says they’ll concede no NFTL based on SOL considerations, but they want the assessments upheld and that Jose and Frances get no refund.

Judge Gale agrees.

Jose and Frances never got SNODs for any of the years at issue, because though they self-reported their liabilities, they just didn’t pay them. Thus no SNOD, because no variation between taxes reported on returns and tax actually owed.

And Jose and Frances signed off on Form 4549, admitting what they owed, and IRS showed they assessed tax within the three-year timeframe.

Judge Gale instructs us as follows. “While the Secretary must generally issue a notice of deficiency before assessing an income tax that is greater than that shown as due by the taxpayer on his return, see secs. 6212(a) and 6213(a), no such notice is necessary for the assessment of amounts reported as due on the return, sec. 6201(a). Similarly, no deficiency notice is required for income taxes covered by Forms 4549, which authorize the Commissioner to assess and collect the taxes reflected thereon…..Respondent is therefore entitled to a decision as a matter of law, and we so hold, that the assessments at issue in this case were timely and validly made. Petitioners having suggested no other infirmity in the assessment process or other failure by the Appeals officer to verify that the requirements of any applicable law or administrative procedure were satisfied, respondent is likewise entitled to a decision as a matter of law, and we so hold, that the Appeals officer satisfied the verification requirement of section 6330(c)(1).” Order, at pp. 5-6. (Footnotes and citations omitted).

No refund without a SNOD.