In Uncategorized on 03/18/2019 at 16:41

You Still Have to Ask

The usual three-and-two lookback on refunds for overpayment (Section 6511) may be suspended by an informal claim per Section 6015(g). But you still have to ask.

Even that Obliging Jurist Judge David Gustafson can’t find that Jim Stuart Brooks, 2019 T. C. Sum. Op. 5, filed 3/18/19 asked. Judge Gustafson revisits Palomares, which I’d almost forgotten, until I looked back my own self and found my blogpost “8379 Does Not Equal 8857,” 12/2/14“8379 Does Not Equal 8857,” 12/2/14. And even though 9 Cir. generously reversed Tax Court to allow Teresa Palomares to recover the overpayments she made (but which were applied to the tax liabilities of nogoodnik ex), she did file the 8379. Jim Stuart only filed his returns, his Form 8857, his Form 656 OIC, and his petition.

Jim Stuart never showed what part of the overpayments were made by him and which from Mrs. Jim Stuart. Jim Stuart lived in SC; I doubt 4 Cir. is as generous as 9 Cir.

Jim Stuart entered into an IA,  but defaulted after one payment. He got an inheritance and didn’t pay any part of his liability. True, his tax problems arose from one very good year, but Judge Gustafson finds he didn’t set anything aside to pay his taxes. Mrs. Jim Stuart seems throughout to have contributed about 17% of the family’s income, and though they weren’t extravagant, Judge Gustafson finds that 83% of the problem is Jim Stuart’s.

And Jim Stuart’s statement of his living expenses was a ballpark guestimate, so no showing of economic hardship..

“Four factors favor retained liability:  Mr. Brooks lacked a reasonable expectation that the liability would be paid when he signed the [year it issue] return (and when he later entered into the installment agreement); he failed to prepay or set aside tax money during a ‘bumper year’; he chose to live off his inheritance rather than paying the liability; and Mrs. Brooks’s approximate share of the liability is relatively small.  Four factors are neutral (marital status, economic hardship, legal obligation, and subsequent tax compliance).  Only two factors weigh in favor of granting relief–Mr. Brooks’s physical health and the lack of significant benefit.” 2019 T. C. Sum. Op. 5, at p. 27.

Jim Stuart loses.

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