In Uncategorized on 05/23/2017 at 17:03

This somewhat cryptic remark is a puzzlement to Paul Niski, 2017 T. C. Sum. Op. 33, filed 5/23/17, and it leads to an unfair result, but such are the anfractuosities of the IRC. And even the taxpayer’s friend, STJ Leyden, can’t help.

The chronology is somewhat muddled, but Paul overpaid some years and underpaid (or didn’t pay) a couple others (hi, Judge Holmes). But he did file and pay late. The arithmetic seems to show Paul would owe little or nothing, except for late filing.

He’s been hit with nonpayment and nonfiling chops, with interest to boot.

Paul says “you had my money.”

IRS says “Overpayments from one year don’t apply to the next, or any other year, unless you seek application or refund within the Section 6511 lookback periods.” In other words, Paul wants refunds, but the SOL on refunds has run.

That Treasury has “the use of monies” is a good argument if the tax had been paid when due, and Treasury held the overpayments. But Paul hadn’t paid when the taxes were due.

“Whether or not the barred claimed overpayments from 2002 and 2006 are characterized as moneys generally in respondent’s hands, they are not considered payments for purposes of calculating the additions to tax.  The Court is bound by the strict terms of the statutory provisions that limit credits or refunds for overpayments to those properly claimed within three years of the date they are paid.  Landry v. Commissioner, 116 T.C. 60, 62-63 (2001); see sec. 6511(b)(2)(A).  As a matter of law amounts paid or deemed paid more than three years before a tax return claiming them is filed cannot reduce or eliminate the additions to tax.  See Mason v. Commissioner, 2001 Tax Ct. Memo LEXIS 75, at *18; Stephenson v. Commissioner, 1995 Tax Ct. Memo LEXIS 35, at *7.” 2017 T. C. Sum. Op. 33, at p. 22.

And see my blogposts “Lookback in Anger,” 11/12/12, and “Lookback in Anger – Part Deux,” 4/15/15.

So even though Paul gets a chance to challenge tax due de novo in this CDP case, he loses.

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