In Uncategorized on 05/20/2016 at 16:55

On a Friday we get a designated hitter from the blogger’s friend and obliging jurist, Judge David Gustafson. And again he parses for us the Section 6511 look back limitations, when overpayments are at issue.

Bradley Ronald Thompson & Beth Michelle Thompson, Docket No. 13012-15SL, filed 5/20/16, came up with the 1040 for the year at issue four years late. They claimed they had a refund coming, so paid nothing on the liability stated in said return. IRS obliged with a NITL; Brad and Beth riposted with a CDP request.

“During the CDP hearing the Appeals officer stated (see Ex. M): “Regarding the refund you were expecting for the 2008 tax year; you have 3 years from the return due date to file a claim for refund. Tax year 2008 was due on April 15, 2009; you had until April 15, 2012 to claim your refund. My research shows the IRS received your return on June 26, 2013. Therefore, you are not entitled to the refund.” Order, at p. 2.

Brad and Beth entered into an IA, so no levy, but Appeals denied the refund as above-stated. So Brad and Beth petition the denial, and IRS, admitting everything that Brad and Beth say, moves for summary J.

Judge Gustafson: “The amount of a credit or refund for an overpayment of income taxes for a taxable year is thus limited by two periods. The first is a period of limitation on filing the claim of refund and the second limitation is a ‘look-back’ period limiting the amount of tax that can be refunded if the claim is timely under the first rule.

“The first limitation requires that a claim for credit or refund of an overpayment of any tax shall be filed by the taxpayer either (1) within 3 years from the time the return was filed, or (2) within 2 years from the time the tax was paid, whichever of those periods expires later. Sec. 6511(a). Under the 3-year lookback period, if the claim was filed within 3 years of filing the return, then the taxpayer is entitled to a refund of taxes paid within 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).” Order, at p. 4. (Citation omitted.)

So, when Brad and Beth filed their return, they were essentially claiming the refund to offset their admitted liability. And as they weren’t then subject to audit, they get the three-year lookback from filing, not due date. Appeals got it wrong, “strictly speaking.” Order, at p. 4.

But Brad and Beth can only get back whatever they paid in the three-year period before they actually filed the return.

IRS claimed the only payment Brad and Beth made was made a year before the farthest-back year of the lookback, so Brad and Beth are out of luck.

But IRS is once again playing the Michael Corleone gambit, with the usual results.

“However, in its motion the IRS failed to substantiate that assertion about the payments made on the Thompsons’ 2008 account. The IRS did not submit any transcript of the Thompsons’ 2008 income tax account or any other evidence. Statements of counsel in a brief do not properly support a factual assertion in a motion for summary judgment.” Order, at p. 5.

No summary J. So, Brad and Beth, come to trial with a check…a canceled check. Or equivalent.




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