TAX COURT OPINION

Case: Bradley Ronald Thompson & Beth Michelle Thompson
Docket Number: 13012-15SL
Judge: Gustafson
Opinion Type: bench
Filed: 06/24/2016
Pages: 6

UNITED STATES TAX COURT WASHINGTON, DC 20217 BRADLEY RONALD THOMPSON & BETH MICHELLE THOMPSON, Petitioners, v. ) ) ) ) ) Docket No. 13012-15SL. COMMISSIONER OF INTERNAL REVENUE, Respondent ) ) ) ORDER Pursuant to Rule 152(b), and to give effect to the opinion of the Court as set forth in the transcript of the proceeding at Baltimore, Maryland, on June 13, 2016, it is ORDERED that the Clerk of the Court shall transmit herewith to petitioners and to respondent a copy of the pages of the transcript of the trial in the above case before the undersigned judge at Baltimore, Maryland, containing his oral findings of fact and opinion rendered at the trial session at which the case was heard. In accordance with the oral findings of fact and opinion, decision will be entered for respondent. (Signed) David Gustafson Judge Dated: Washington, D.C. June 24, 2016 SERVED Jun 24 2016 Capital Reporting Company Bench Opinion by Judge David Gustafson June 13, 2016 Bradley Ronald Thompson & Beth Michelle Thompson v. 3 Commissioner Docket No. 13012-15SL The Court has decided to render in this case the following as its oral Findings of Fact and Opinion, 1 2 3 4 5 6 7 8 which shall not be relied on as precedent in any 9 other case. This Bench Opinion is made pursuant to 10 11 12 13 14 15 the authority granted by section 7459(b) of the Internal Revenue Code, and Rule 152 of the Tax Court Rules of Practice and Procedure. This "collection due process" ("CDP") case is an appeal by petitioners Bradley and Beth Thompson, pursuant to 26 U.S.C. section 6330(d), asking this 16 Court to review the determination by the Office of 17 18 19 20 21 Appeals of the Internal Revenue Service ("IRS") in connection with a notice of proposed levy to collect the Thompsons' ·unpaid income tax for the three years 2002, 2003, and 2010. Trial was held June 13, 2016, in Baltimore, 22 Maryland. The Thompsons represented themselves, and 23 Elizabeth Mourges represented the Commissioner. The 24 25 only issue in dispute is IRS Appeals' denial of the Thompsons' request that an overpayment from the year 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 1 2 3 4 5 2008 be applied to their 2010 liability. We hold that the denial was not an abuse of discretion but was correct as a matter of law. Findings of Fact In 2008 the Thompsons earned wage income from 6 which Federal income taxes totaling $13,702 were 7 withheld. That withholding constituted their only 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Federal income tax payments for 2008. (Stip. S.) In 2009 the Thompsons hired a return preparer to prepare their 2008 tax return. The preparer computed that they had overpaid their Federal income tax by $3,998 (Exs. 1-J, 12-P), and the IRS does not dispute that conclusion. The preparer was to file electronically a return claiming a refund of that overpayment; but in view of the burden of proof principles set out below, we find that the Thompsons' 2008 return was not filed with the IRS at that time. For the year 2010, the Thompsons filed a return showing a liability that they did not fully pay. There is no dispute about the amount of their 2010 liability. The Thompsons had controversy with the IRS concerning their unpaid Federal income taxes for 24 multiple years, including 2010. In the course of 25 addressing.their controversy with the IRS, the 866.488.DEPO www.CapitalReportingCompany.com . Capital Reporting Company 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Thompsons learned that their 2008 overpayment had never been allowed and applied to other years. No later than January 2011 they were told that the IRS had no record of their having filed a 2008 return (which at that time was less than two years overdue). (See Ex. 4-J.) They did not file a 2008 return at that time. Rather, they first filed a return claiming a 2008 overpayment in June 2013. (Stip. 2; Ex. 1-J.) On September 19, 2014, the IRS sent to each of the Thompsons a final notice of intent to levy to collect their unpaid income tax for 2002, 2003, and 2010. (Ex. 5-J.) On October 17, 2014, the Thompsons timely requested a CDP hearing. (Ex. 6-J.) In that hearing the Thompsons did not dispute their liabilities, and they reached agreement with IRS Appeals on the terms of an installment agreement. As a result, Appeals issued to each of the Thompsons on 19 April 15, 2015, a notice of determination (Ex. 11-J) 20 21 22 23 24 25 that did not sustain the proposed levy (which would be unnecessary if the liabilities were paid according to the agreement). However, Appeals did not determine that the 2008 overpayment should be allowed and credited to the 2010 liability, as the Thompsons had requested. They therefore mailed a timely 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company petition to thïs Court on May 12, 2015. At that time 6 they resided in Maryland. (Stip. 1.) Opinion As petitioners, the Thompsons have the burden of proof, see Rule 142(a)--in this case, the burden to prove the timing of their payments of tax and the filing of a claim for refund in time to reach those payments. We hold they did not sustain that burden. Our order of May 20, 2016, set out the text of section 6511 and explained its operation, which we summarize here. The amount of a credit or refund for an overpayment of income taxes for a taxable year is limited by two periods. Relevant here is the second limitation--a 3-year "look-back" period limiting the amount of tax that can be refunded. The Thompsons filed their 2008 tax return on June 26, 2013. The Thompsons' return was their claim for refund. See 26 C.F.R. sec. 301.6402-3(a)(1). Because the original return and the claim for refund were on the same document, the Thompsons' claim was filed within 3 years of the filing of the return for 2008 and is timely. However, the Thompsons are limited to recovering any tax that they paid within the 3-year period immediately preceding their claim. See sec. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com Capital Reporting Company 7 1 2 3 4 5 6 7 8 6511(b)(2)(A). The 3-year "look-back" period immediately preceding the Thompsons' claim would be June 2010 to June 2013, and payments made for tax year 2008 during that period could be refunded. Section 6511(b)(2)(A). However, the parties stipulate (Stip. 5) that the only payments made on the Thompsons's 2008 tax account were made on April 15, 2009, the deemed paid date 2008 withholding, 9 which fact bars the Thompsons's 2008 overpayment. Therefore, IRS Appeals did not abuse its discretion when it declined to credit the 2008 income tax overpayment against the Thompsons' income tax liabilities for other years. This concludes the Court's oral Findings of Fact and Opinion in this case. (Whereupon, at 2:52 p.m., the above- entitled matter was concluded.) 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 866.488.DEPO www.CapitalReportingCompany.com