In Uncategorized on 10/19/2017 at 16:08

No, not the 1963 Surfaris’ immortal instrumental that encapsulated California surfing. This is the story of how IRS wiped out one year’s shortfall with a supposed overpayment in another year (that latter year not being before the court), but discovered arithmetic errors that nullified the supposed overpayment, so wiped out the previous wipe out.

Wendell C. Robinson and May T. Jung-Robinson, 2017 T. C. Memo. 207, filed 10/19/17, put in no evidence that their computation of tax was correct. They claim IRS needed to send them a SNOD for the unpaid tax due as a result of the wipe-out of the wipe-out.

“While in general section 6213(a) restricts the Secretary from assessing or taking action to collect any deficiency in tax until after he has mailed the taxpayer a statutory notice of deficiency, section 6213(b)(1) provides an exception for assessments arising out of the taxpayer’s mathematical or clerical errors.  The Secretary need not issue a statutory notice before assessing a tax when a ‘taxpayer is notified that, on account of a mathematical or clerical error appearing on the return, an amount of tax in excess of that shown on the return is due, and that an assessment of the tax has been or will be made on the basis of what would have been the correct amount of tax but for the mathematical or clerical error”.  See sec. 6213(b)(1).  If, however, the taxpayer requests abatement of the assessment within 60 days of the notice of mathematical or clerical error, the Secretary must abate the assessment and must use deficiency procedures to reassess.  Sec. 6213(b)(2)(A).

“Similarly, section 6201(a)(3) authorizes the Secretary to assess any payment amount overstated as estimated income tax ‘in the same manner as in the case of a mathematical or clerical error.’  However, the Secretary does not have to abate the assessment and use deficiency procedures, as he would under section 6213(b)(2)(A) if the taxpayer objects to the notice of the assessment.  Sec. 6201(a)(3).

“Under section 6665(b), the Secretary is authorized to summarily assess additions to tax under section 6651 for late filing of a return and for failure to pay the amount shown on the return.  See Gray v. Commissioner, 140 T.C. 163, 169-170 (2013).  Finally, interest is not generally subject to deficiency proceedings.  Sec. 6601(e).” 2017 T. C. Memo. 207, at pp. 17-18.

For more about the Gray case, see my blogpost “Too Late and Not Timely,” 4/25/13.

So Wendell and May get levied, and suffer a wipe out.

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