T.C. Memo. 1997-234

UNITED STATES TAX COURT

SUSAN L. LESINSKI, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 22086-95. Filed May 21, 1997.

Susan L. Lesinski, pro se.

Tyron J. Montague and Peter K. Reilly, for respondent.

MEMORANDUM OPINION

TANNENWALD, Judge: This matter is before the Court on

respondent's motion for leave to file an amendment to answer in

which she seeks to recover an asserted erroneous refund. 

Petitioner and her husband obtained extensions of time to

file their joint Federal income tax return for the taxable year
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1 Unless otherwise indicated, all statutory references are

to the Internal Revenue Code in effect for the year in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.

1991 until October 15, 1992. Petitioner and her husband made

payments regarding their 1991 tax liability as follows: 

Type Amount Date

Estimated tax payment $2,000 June 18, 1991

Estimated tax payment 7,000 Sept. 18, 1991

Estimated tax payment 17,000 Jan. 18, 1992

Credit from 1990 return 15,874 April 15, 1992

Income tax withheld 2,381 April 15, 1992

Payment with extension 13,500 April 15, 1992

 request 

Total $57,755

On July 26, 1995, respondent mailed petitioner a notice of

deficiency for the taxable year 1991 (the notice) determining a

deficiency of $80,596 in tax plus additions to tax of $20,149

under section 6651(a) and $4,635 under section 6654.1 As of that

date, petitioner had not filed a Federal income tax return, or a

claim for a refund, for that year. Respondent did not issue a

notice of deficiency to petitioner's husband. 

On October 15, 1995, petitioner and her husband mailed a

joint Federal income tax return for 1991 (the return) to the

Internal Revenue Service (IRS). The return reflected a tax

liability of $47,840, payments totaling $57,755, and an

overpayment of $9,915. On the return, petitioner and her husband

requested that $9,715 of the overpayment be applied to their 1992
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2 The record contains a copy of the decision document

showing that petitioner signed it on Aug. 7, 1996.

estimated tax, and the remaining $200 to the estimated tax

penalty. On October 19, 1995, the IRS received the return.

On October 27, 1995, petitioner, at that time a resident of

New York, filed her petition in this case, attaching a copy of

the return. Respondent filed her answer on December 1, 1995. On

April 5, 1996, we issued our notice setting the case for trial at

the trial session beginning September 9, 1996. 

In or about April 1996, the IRS, allegedly without the

knowledge of respondent's counsel in this case, issued a refund

to petitioner and her husband for the taxable year 1991 (the

refund) in the amount of $10,043.59 ($9,915.00 plus interest). 

At some point, respondent accepted the return as filed, and on

June 26, 1996, sent petitioner a decision document reflecting no

deficiency.2 On August 28, 1996, respondent filed her motion for

leave to file an amendment to answer in order to recover the

refund, alleging that it was erroneous because neither petitioner

nor her husband was eligible for a refund due to the expiration

of the period of limitations contained in sections 6512(b)(3) and

6511(b)(2). In her motion, respondent states that the deficiency

she now seeks "is solely attributable to the erroneous refund"

and that she is no longer seeking any additions to tax. 

Petitioner opposes respondent's motion on the grounds that

the matter of the deficiency as stated in the notice was resolved
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by respondent’s acceptance of petitioner’s return and that we

lack jurisdiction over the refund because there is no deficiency. 

Petitioner also objects due to the motion's lateness and

prejudicial effect. Respondent argues that her claim in respect

of the refund constitutes a determination of deficiency and that,

therefore, this Court has jurisdiction to grant its recovery. We

first address the jurisdictional issue. 

Section 6514(a)(1) provides that "A refund of any portion of

an internal revenue tax shall be considered erroneous and a

credit of any such portion shall be considered void * * * If made

after the expiration of the period of limitation for filing claim

therefor, unless within such period claim was filed". Refunds

may be erroneous for other reasons. Secs. 6514, 7405. 

Respondent has more than one remedy to recover erroneous refunds;

these include bringing a civil suit under section 7405 or

following the deficiency procedures under sections 6211 through

6215. Beer v. Commissioner, 733 F.2d 435, 436 (6th Cir. 1984),

affg. T.C. Memo. 1982-735; Pesch v. Commissioner, 78 T.C. 100,

117-118 (1982).

The jurisdiction of this Court is limited and may be

exercised only pursuant to specific statutory authorization. 

Belloff v. Commissioner, 996 F.2d 607, 611 (2d Cir. 1993), affg.

T.C. Memo. 1991-350; Pen Coal Corp. v. Commissioner, 107 T.C.

249, 254 (1996). That authorization encompasses the

determination of deficiencies pursuant to section 6214(a) and
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overpayments, subject to specific limitations, under section

6512(b). Obviously, the provisions of section 6512(b) are not

applicable because petitioner herein is not claiming any

overpayment. It is respondent who, having accepted the fact that

there was an overpayment and refunded it, now seeks to utilize

the deficiency procedure to recapture that refund. To achieve

her objective, respondent's claim must fall within the scope of

the deficiency procedure.

The term “deficiency” means the amount by which the tax

imposed exceeds the excess of --

(1) the sum of

(A) the amount shown as the tax by the

taxpayer upon his return, if a return was made by

the taxpayer and an amount was shown as the tax by

the taxpayer thereon, plus

(B) the amounts previously assessed (or

collected without assessment) as a deficiency,

over--

(2) the amount of rebates, as defined in

subsection (b)(2), made. [Sec. 6211(a).]

The tax imposed and the tax shown on the return are determined

without regard to payment on account of estimated tax or

withholding credits. Sec. 6211(b)(1). Section 6211(b)(2)

defines “rebate” to mean “so much of an abatement, credit,

refund, or other payment, as was made on the ground that the tax

imposed * * * was less than the excess of the amount specified in

subsection (a)(1) over the rebates previously made." Thus, not

all refunds are rebates. See O’Bryant v. United States, 49 F.3d
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340 (7th Cir. 1995); Groetzinger v. Commissioner, 69 T.C. 309,

312 (1977); sec. 301.6211-1(f), Proced. & Admin. Regs.

Application of the foregoing statutory provisions to an

erroneous refund requires a determination of the basis of the

refund, i.e., is it a rebate within the meaning of section

6211(b)(1)? The answer to this question depends upon what the

refund herein represents. If it is a refund related to the

recalculation of petitioner's tax liability, then it constitutes

a rebate. If it is unrelated to a recalculation of petitioner's

tax liability, then it is properly characterized as a nonrebate

refund. See O'Bryant v. United States, supra, wherein the

foregoing dichotomy is set forth; see also Clark v. United

States, 63 F.3d 83 (1st Cir. 1995); Groetzinger v. Commissioner,

supra at 315.

In the instant case, respondent has accepted the amount

shown as tax on the return as the correct amount of tax imposed. 

She is not seeking to increase the amount of that tax. The

amount of the refund check was the amount by which the payments

exceeded the amount of tax shown on the return, plus interest. 

The refund was not made on the ground that the tax imposed was

less than the amount of tax shown; therefore, it is not a rebate. 

The amount of the deficiency as defined in section 6211 is,

therefore, zero. Thus, respondent cannot seek an increased

deficiency in order to recover the refund.
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Nor can respondent salvage her position because the amount

of the alleged erroneous refund is less than the amount of the

deficiency originally determined in the notice so that only a

different ground for the deficiency is involved. The hard fact

is that the claim for the erroneous refund simply does not fall

within the definition of a deficiency and is therefore not merely

a new ground for a properly claimed deficiency.

We conclude that the subject matter of respondent's

amendment to answer is not within our jurisdiction, and therefore

respondent's motion will be denied. We note, however, that

respondent may pursue recovery of the refund in U.S. District

Court under section 7405. Generally, the period of limitation

for bringing suit is within 2 years of making the erroneous

refund. Secs. 7405(d), 6532(b). Our determination that we lack

jurisdiction with respect to respondent's claim appears to

preclude the application of the principles of res judicata to the

decision of no deficiency in tax for 1991 which will be entered

herein. United States v. Wynshaw, 697 F.2d 85, 87 (2d Cir.

1983); Morse v. United States, 494 F.2d 876, 879 (9th Cir. 1974). 

An appropriate order will

be entered denying respondent's 

motion, and decision will be 

entered for petitioner.