T.C. Memo. 1998-74

UNITED STATES TAX COURT

CRAIG M. AND REBECCA MAXWELL, Petitioners v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 17052-96. Filed February 23, 1998.

Craig M. Maxwell and Rebecca Maxwell, pro sese.

Edwin A. Herrera and Ian Russell, for respondent.

MEMORANDUM OPINION

LARO, Judge: Craig M. and Rebecca Maxwell petitioned the

Court to redetermine respondent's determination of the following

deficiencies in their 1990 through 1993 Federal income taxes and

additions thereto:
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Craig M. Maxwell

 Additions to Tax 

 Sec. Sec.

Year Deficiency 6651(a)(1) 6654

1990 $280,484 $42,621 $18,422

1991 2,571 643 149

1992 68,868 17,205 3,003

1993 70,431 17,153 2,869

Rebecca Maxwell

 Additions to Tax 

 Sec. Sec.

Year Deficiency 6651(a)(1) 6654

1990 $137,827 $34,457 $9,074

1991 904 226 54

1992 32,725 8,181 1,427

1993 29,976 7,494 1,255

Following respondent's concessions we must decide whether

petitioners are entitled to refunds of overpayments for their

1990, 1992, and 1993 taxable years. We hold they are not. 

Section references are to the Internal Revenue Code in effect for

the years in issue. Rule references are to the Tax Court Rules

of Practice and Procedure.

Background

All facts have been stipulated and are so found. The

stipulated facts and the exhibits submitted therewith are

incorporated herein by this reference. Petitioners resided in

Riverside, California, when they petitioned the Court.

Petitioners delinquently filed Federal income tax returns

for each of the subject years. Respondent received petitioners'
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1990 through 1992 Federal income tax returns on September 3,

1997, and respondent received petitioners' 1993 return 1 day

later. On May 6, 1996, the Commissioner had issued each

petitioner two notices of deficiency, one for 1990 and 1991, and

the other for 1992 and 1993. Before doing so, the Commissioner

had prepared "returns" for each petitioner for each year in issue

under the authority of section 6020(b). 

For each subject year, petitioners' income tax liability,

tax payments, and overpayments are as follows:

 1990 1991 1992 1993

Tax Liability $169,829 $0 $0 $0

Tax Payments

 Oct. 17, 1990 3,390 ---

 Feb. 3, 1991 9,000 ---

 Apr. 15, 1991 207,610 --- 

 Apr. 15, 1993 --- --- 100 ---

 Apr. 15, 1994 --- --- --- 3,641 

 Total 220,000 0 100 3,641

Overpayment 50,171 0 100 3,641

Discussion

Respondent argues that petitioners are not entitled to a

refund of any of the overpayments because the disputed amounts

paid for each year were paid by petitioners more than 2 years

before the issuance of the notice of deficiency. Petitioners

argue that they are entitled to a refund for 1990 because they

filed their 1990 Federal income tax return in 1997, a time that

is within 3 years of the time that the petition was filed
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1 Petitioners' brief does not address any of the other years

in issue.

2 Contrary to petitioners' argument, this case is controlled

by the Commissioner v. Lundy, 516 U.S. 235 (1996) case. Although

sec. 1282(a) of the Taxpayer Relief Act of 1997, Pub. L. 105-34,

111 Stat. 788, 1037, recently amended sec. 6512(b)(3) in

response to the result in Lundy case, this amendment is

inapplicable to the instant proceeding because the amendment is

effective with claims for credit or refund for taxable years

ending after Aug. 5, 1997.

herein.1 Petitioners argue that section 6512(b) and Commissioner

v. Lundy, 516 U.S. 235 (1996), have no bearing here because the

Commissioner agrees that petitioners are entitled to a refund for

1990.

We agree with respondent. Petitioners must demonstrate that

their claim for refund was timely. Flagg v. Commissioner,

T.C. Memo. 1997-297. Although section 6512(b)(1) bestows

jurisdiction on this Court to determine the existence and amount

of any overpayment of tax to be refunded for a year before us,

section 6512(b)(3)(B) prohibits the Court from awarding a refund

unless we determine that the refunded amount was paid 

within the period which would be applicable under

section 6511(b)(2) * * * or (d), if on the date of the

mailing of the notice of deficiency a claim had been

filed (whether or not filed) stating the grounds upon

which the Tax Court finds that there is an overpayment

* * *

See also Commissioner v. Lundy, supra at 241-242.2 The relevant

provision of section 6511(b)(2) provides that when a claim for

refund is not filed within the 3-year period of section 6511(a),

the amount of the refund may not exceed the amount of tax paid
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within the 2 years preceding the claim for refund. Sec.

6511(b)(2)(B). Section 6511(a) states that a claim for refund

generally must be made within 3 years from the time the return

was filed or if no return was filed by the taxpayer, within 2

years from the time the tax was paid. 

We apply the established law on the refund of overpayments

to the stipulated amounts shown in the chart above. The withheld

amounts were deemed withheld on April 15 of the filing years,

sec. 6513(a) and (b)(1), and, when respondent issued petitioners

the notices of deficiency, petitioners had not yet filed their

returns. Thus, petitioners are limited to a refund of only the

amounts that they paid during the 2-year period prior to the time

that the notices of deficiency were issued. Commissioner v.

Lundy, supra. Because petitioners paid none of the disputed

amounts within this 2-year period, we hold that they are not

entitled to a refund of any of these amounts.

In reaching our holdings herein, we have considered all

arguments made by petitioners for contrary holdings and, to the

extent not discussed above, find them to be irrelevant or without

merit.

To reflect the foregoing, 

Decision will be entered

stating that there is no

deficiency or additions to tax

for any of the subject years.