Court Opinion

ID: 4474554
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:00.651132+00
Date Added: 2024-06-11T14:53:52.395656
License: Public Domain

OPINION Ruwe, Judge: This matter is before the Court pursuant to the estate’s motion for proceeding to enforce overpayment determination pursuant to Rule 260.1 Our jurisdiction to grant such relief is conferred by section 6512(b)(2). Background In 1994, respondent issued a notice of deficiency determining an estate tax deficiency of $663,785 and an accuracy-related penalty under section 6662(a) of $132,785. The estate filed its petition with this Court seeking redetermination of the deficiency. In March 1998, after our first Opinion and decision that there was a deficiency of $564,429.87, the estate paid $646,325.76 with respect to its estate tax. Our first decision was appealed and never became final. After many years of litigation,2 we entered a decision on January 24, 2002, that is now final. In our decision, we determined that the estate was due an “overpayment in estate tax in the amount of $238,847.24, which amount was paid after the mailing of the notice of deficiency”. Pertinent Dates and Information Decedent died on November 16, 1990. The estate filed the estate tax return on July 12, 1991, and included with it a payment of $60,164.54, which was the tax liability reported on the return. On March 31, 1998, after our initial decision that there was a deficiency in the amount of $564,429.87, the estate remitted a $646,325.76 payment (advance payment). Respondent also credited the estate’s estate tax liability with a 1992 income tax overpayment of $63,052. On May 12, 1998, respondent made a “quick assessment” of estate tax of $564,429.87 and deficiency interest thereon of $410,848.76. On January 18, 2002, after our most recent opinion in this case, respondent filed respondent’s computation for entry of decision (respondent’s computation) along with a proposed decision. Counsel for both parties acknowledged that respondent’s computation was in accordance with our opinion in Estate of Smith v. Commissioner, T.C. Memo. 2001-303, affd. 54 Fed. Appx. 413 (5th Cir. 2002). Based on that computation, the parties stipulated that we should enter a decision “that there is an overpayment in estate tax in the amount of $238,847.24, which amount was paid after the mailing of the notice of deficiency”.3  On January 24, 2002, we entered our decision that there was a $238,847.24 overpayment of estate tax paid after the mailing of the notice of deficiency and that there was no penalty due from the estate under section 6662(a). That decision was appealed and affirmed and is now final. Sec. 7481(a). Respondent’s computation contained the following documents: (1) Respondent’s computation statement, the pertinent information of which is listed as follows: Tax assessed and paid $624,594.41 Payments: July 12, 1991 $60,164.54 Apr. 15, 1993 63,052.00 Mar. 31, 1998 501,377.87 Total payments 624,594.41 Tax liability pursuant to mandate 385,747.17 Overpayment 238,847.24 Penalty sec. 6662(a) - - - None (2) Form 3614-A, Estate Tax, which recomputed in detail the estate’s estate tax liability; (3) Form 6180, Line Adjustment — Estate Tax, which recomputed in detail decedent’s taxable estate; (4) a detailed interest calculation which determined the estate’s total Federal deficiency interest deduction as $209,943.54; and (5) Form 3623, Statement of Account. For simplicity, the following table is an extraction of the information therein contained: Tax Interest Revised liability $385,747.17 Assessment (tax on return) 60,164.54 Tax Court assessment (5/12/98) 564.429.87 $410,848.76 Total assessments 624,594.41 Decrease in assessment Revised liability (238,847.24) 385,747.17 Payments: Payment with return (7/12/91) 60,164.54 Credit transfer 1992 (4/15/93) 63,052.00 Advance payment1 (3/31/98) 501.377.87 144,947.89 Total payments 624,594.41 Overpayment (238,847.24) The interest referred to in this document is interest on the underpayment of tax that accrued prior to the estate’s payment of $646,325.76 on March 31, 1998. Hereafter, we refer to interest accrued during that period as underpayment interest. See Sunoco, Inc. & Subs. v. Commissioner, 122 T.C. 88 (2004). On May 6, 2002, after our final decision, respondent abated $180,564.04 of the previously assessed underpayment interest and $238,847.24 of the previously assessed estate tax. On May 13, 2002, respondent issued to the estate a refund check of $210,467.35, consisting of a $153,510.41 refund for overpayment of estate tax and $56,956.94 in interest on that refunded amount. Respondent computed the $153,510.41 portion of the refund by subtracting $85,336.83 from the $238,847.24 overpayment amount in our final decision. According to respondent, the $85,336.83 was the amount of assessed but unpaid underpayment interest. On October 6, 2003, respondent abated $20,341.20 in underpayment interest. On October 6, 2003, respondent refunded $30,108.47 to the estate.4  Discussion In its motion, the estate argues that the amount refunded by respondent, $210,467.35 ($153,510.41 in overpaid estate taxes and $56,956.94 in interest on that amount) was incorrect. It is the estate’s position that since this Court entered a decision that there was a $238,847.24 overpayment, it is this amount, plus interest thereon, which should be refunded to the estate. Accordingly, the estate seeks $85,336.83, the difference between $238,847.24 and $153,510.41, plus interest thereon.5 We ordered respondent to respond to the motion. In response, respondent argues that at the time the Court’s decision became final, the estate owed assessed and unpaid underpayment interest of $85,336.83. Respondent acknowledges that the estate’s total payments exceed both the tax and interest regarding the estate tax liability but bases his argument on the allocations of the payments that respondent made between tax and interest. Respondent argues that he had originally, before the final decision, assessed underpayment interest in the amount of $410,848.76 and allocated $144,947.89 (from the $646,325.76 March 31, 1998, advance payment) to that underpayment interest. On the basis of the final decision, respondent explains that he abated $180,564.04 in underpayment interest. Thus, after all respondent’s allocations and abatements, respondent alleges that $85,336.83 in underpayment interest remained unpaid. Respondent states that he subtracted this amount from the $238,847.24 overpayment that we determined, and he applied the $85,336.83 to assessed but unpaid interest pursuant to section 6402. This resulted in the May 13, 2002, refund of $210,467.35, which consisted of $153,510.41 ($238,847.24 minus $85,336.83) plus interest on the $153,510.41. Respondent argues that pursuant to section 6402(a) he is entitled to credit part of the $238,847.24 overpayment against interest that accrued on the unpaid estate tax for the period before the estate’s $646,325.76 payment on March 31, 1998. Neither party cites any caselaw to support their respective positions. Both parties have submitted written arguments in support of their positions, and both state that they do not request a hearing on this matter. The parties stipulated that our decision, that the estate had an overpayment of $238,847.24, was in accordance with our opinion in Estate of Smith v. Commissioner, T.C. Memo. 2001-303. The decision was affirmed by the Court of Appeals for the Fifth Circuit. See Estate of Smith v. Commissioner, 54 Fed. Appx. 413 (5th Cir. 2002). Both parties agree that our opinion and decision are now final. Respondent, nevertheless, argues that he was entitled to refund less than the $238,847.24 overpayment amount, by applying $85,336.83 of that overpayment amount to assessed and unpaid underpayment interest which apparently he did not factor into his computation of the overpayment amount that is in our final decision. We must first decide whether the amount of an “overpayment” must include consideration of any underpayment interest owed by a taxpayer at the time of the overpayment calculation. Stated differently, can there be an “overpayment” in an amount that has not been reduced by unpaid underpayment interest? 1. What Constitutes an Overpayment? The Code does not have an all-inclusive definition of an “overpayment”. Section 6401 provides examples of certain types of overpayments. For instance, the term “overpayment” includes “that part of the amount of the payment of any * * * tax which is assessed or collected after the expiration of the period of limitation properly applicable thereto.” Sec. 6401(a). On the other hand, section 6401(c) provides that an “amount paid as tax shall not be considered not to constitute an overpayment solely by reason of the fact that there was no tax liability in respect of which such amount was paid.” However, these specific provisions do not provide a general definition of the term. The Supreme Court in Jones v. Liberty Glass Co., 332 U.S. 524, 531 (1947), has defined an overpayment as follows: we read the word “overpayment” in its usual sense, as meaning any payment in excess of that which is properly due. Such an excess payment may be traced to an error in mathematics or in judgment or in interpretation of facts or law. And the error may be committed by the taxpayer or by the revenue agents. Whatever the reason, the payment of more than is rightfully due is what characterizes an overpayment. See also United States v. Dalm, 494 U.S. 596, 609 n.6 (1990) (“The commonsense interpretation is that a tax is overpaid when a taxpayer pays more than is owed, for whatever reason or no reason at all.”); Sunoco, Inc. & Subs. v. Commissioner, 122 T.C. 88 (2004); Bachner v. Commissioner, 109 T.C. 125 (1997), aff'd. without published opinion 172 F.3d 859 (3d Cir. 1998); Estate of Baumgardner v. Commissioner, 85 T.C. 445, 450 (1985). Obviously, as we have previously observed: “In order to determine the existence of an overpayment, there must first be a determination of the amount of tax properly due.” Winn-Dixie Stores, Inc. & Subs. v. Commissioner, 110 T.C. 291, 295 n.5 (1998) (citing Girard Trust Bank v. United States, 226 Ct. Cl. 366, 369, 643 F.2d 725, 727 (1981)). This leads to the question of the meaning of the term “tax”. The Code generally treats underpayment interest as tax. Section 6601(e)(1) provides: SEC. 6601(e). Applicable Rules. — Except as otherwise provided in this title— (1) Interest treated as tax. — Interest prescribed under this section on any tax shall be paid upon notice and demand, and shall be assessed, collected, and paid in the same manner as taxes. Any reference in this title {except subchapter B of chapter 63, relating to deficiency procedures) to any tax imposed by this title shall be deemed also to refer to interest imposed by this section on such tax. [Emphasis added.] Section 6512(b)(1)6 confers our overpayment jurisdiction in cases that are properly before the Court pursuant to our deficiency jurisdiction.7 The pertinent part of section 6512(b)(1) provides that if the Tax Court “finds that the taxpayer has made an overpayment * * * of estate tax * * * the Tax Court shall have jurisdiction to determine the amount of such overpayment”. (Emphasis added.) Section 6512(b) is not part of the deficiency procedures in subchapter B of chapter 63.8 Therefore, the reference to tax in section 6512(b) must, pursuant to section 6601(e), include interest on tax. As we stated in Barton v. Commissioner, 97 T.C. 548, 552 (1991): section 6601(e) states that interest shall be treated as tax and that any reference in title 26 to the term “tax” “shall be deemed also to refer to interest.” The lone exception to this statutory rule relates to subchapter B of chapter 63 containing both the definition of “deficiency” and this Court’s jurisdictional authority to redetermine a “deficiency”. Section 6512, which gives this Court jurisdiction to determine overpayments, is not within sub-chapter B of chapter 63, and the literal terms of section 6601(e)(1) provide that interest is to be treated as tax for all other purposes in title 26, including section 6512(b). * * * [9] See Winn-Dixie Stores, Inc. & Subs. v. Commissioner, supra at 295 (“An 'overpayment’ of tax can include interest. Section 6601(e)(1) provides that interest shall be treated as tax and that any reference in title 26 to the term ‘tax’ shall be deemed also to refer to ‘interest’. The lone exception to this rule is that interest is not considered a tax for purposes of determining a ‘deficiency”’.).10 As we recognized in Lincir v. Commissioner, 115 T.C. 293, 298 (2000), affd. 32 Fed. Appx. 278 (9th Cir. 2002): Consistent with section 6601(e), the Court does have jurisdiction to redetermine statutory interest where a taxpayer has properly invoked the Court’s overpayment jurisdiction pursuant to section 6512. See Barton v. Commissioner, 97 T.C. 548, 554-555 (1991). In Winn-Dixie Stores, Inc. & Subs. v. Commissioner, 110 T.C. 291 (1998), we held that the Court had jurisdiction under section 6512 to review the taxpayers’ claim that they had overpaid statutory interest for the years in issue where the Commissioner had rejected the taxpayers’ request pursuant to section 6402(a) to offset the tax deficiencies (and interest) for the years before the Court against the taxpayers’ overpayments for earlier years. * * * [11] See also Sunoco, Inc. & Subs. v. Commissioner, 122 T.C. at 94 (“Respondent concedes that this Court has jurisdiction under section 6512(b) to determine an overpayment based upon petitioner’s claim that it overpaid underpayment interest. Respondent acknowledges that excess underpayment interest which has been assessed and paid by petitioner ‘becomes part of the overpayment, i.e., a payment in excess of that which is properly due.’”).12  Respondent makes no argument in this case that underpayment interest is not an appropriate factor to be considered in determining an overpayment of tax. Indeed, respondent’s own regulations provide: there can be no overpayment of tax until the entire tax liability has been satisfied. Therefore, the dates of overpayment of any tax are the date of payment of the first amount which (when added to previous payments) is in excess of the tax liability (including any interest, addition to the tax, or additional amount) * * * [Sec. 301.6611-l(b), Proced. & Admin. Regs.; emphasis added.13] This regulation provides two examples of assessments, payments, and resulting overpayments. The second example in subpart (c) of the regulation involves a situation where a deficiency had been assessed against a corporate taxpayer and the deficiency and interest had been paid. Subsequently, it was determined that there was no deficiency. In delineating the amounts and dates of overpayments, the regulation provides that “The amount of any interest paid with respect to the deficiency * * * is also an overpayment.”14 Sec. 301.6611-1(c), Proced. & Admin. Regs. In order to determine whether or not an overpayment exists, we must first determine the proper amount of tax.15 In light of the above-cited cases and section 301.6611-l(b), Proced. & Admin. Regs., we hold that for purposes of determining an overpayment of tax pursuant to section 6512(b), the proper tax includes underpayment interest and that the amount of an overpayment is the amount by which payments exceed the tax, including any underpayment interest.16  2. Sections 6402(a) and 6512(b)(4) In his response, respondent explains that the estate’s refund is less than the $238,847.24 overpayment amount, because section 6402(a) entitled him to apply part of the $238,847.24 to assessed but unpaid underpayment interest. Section 6402(a) provides: SEC. 6402. AUTHORITY TO MAKE CREDITS OR REFUNDS. (a) General Rule. — In the case of any overpayment, the Secretary, within the applicable period of limitations, may credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment and shall, subject to subsections (c), (d), and (e) refund any balance to such person. Respondent cites only section 6402 and does not cite or rely on section 6512(b)(4). However, we address the application of both sections 6402 and 6512(b)(4). Section 6512(b)(4) provides: (4) Denial of jurisdiction regarding certain credits and reductions. — The Tax Court shall have no jurisdiction under this subsection to restrain or review any credit or reduction made by the Secretary under section 6402. We do not think that sections 6402 and 6512(b)(4) contemplate the situation presented in this case. A more logical interpretation of sections 6402 and 6512(b)(4) is that this Court may not restrain or review the Commissioner’s section 6402(a) application of an overpayment amount to tax liabilities other than those which were the subject of the overpayment decision. See, e.g., Savage v. Commissioner, 112 T.C. 46 (1999). Our interpretation is buttressed by the language of section 6402(a), which gives the Secretary the power to “credit the amount of such overpayment, including any interest allowed thereon, against any liability in respect of an internal revenue tax on the part of the person who made the overpayment”. Before section 6402 comes into play, there must be an overpayment of a specific tax, and the amount of that overpayment must be calculated by determining the proper amount of tax and determining the amount by which payments exceed the proper tax. As we have held above, the proper amount of tax for purposes of an overpayment includes underpayment interest. Section 6512(b)(2), which forms the basis of our jurisdiction to order the refund of an overpayment, provides: (2) Jurisdiction to enforce. — If, after 120 days after a decision of the Tax Court has become final, the Secretary has failed to refund the overpayment determined by the Tax Court, together with the interest thereon as provided by subchapter B of chapter 67, then the Tax Court, upon motion by the taxpayer, shall have jurisdiction to order the refund of such overpayment and interest. * * * Were we to allow respondent to reduce the refund of an overpayment by an amount that should have already been factored into determining the amount of the overpayment, we would, in effect, be allowing respondent to disregard the amount of the overpayment in our final decision. That would do violence to the definition of the term “overpayment” and ignore the binding nature of our final decision. Our decision was clear: the estate overpaid its estate tax by $238,847.24. Respondent’s position that he is reducing the refund of the overpayment by the amount of assessed but unpaid underpayment interest simply fails to recognize that underpayment interest is part of the calculation that must be made in arriving at the amount of an overpayment. We hold that we have jurisdiction over the estate’s motion under section 6512(b)(2) and that sections 6402 and 6512(b)(4) do not apply where our final decision in the same case precludes the existence of the tax liabilities to which the Commissioner attempts to apply the overpayment.17  3. Finality A prerequisite to filing a motion pursuant to section 6512(b)(2) is the finality of the overpayment decision. We cannot modify our final decision that there was an overpayment of $238,847.24 solely because of respondent’s allegation that he failed to include all the underpayment interest in his calculation of the overpayment amount. We recently discussed the standards for vacating a final decision in Cinema ’84 v. Commissioner, 122 T.C. 264 (2004). In that Opinion, we noted that as a general rule the finality of a decision is absolute. See Abatti v. Commissioner, 86 T.C. 1319, 1323 (1986), affd. 859 F.2d 115 (9th Cir. 1988). We noted that we have jurisdiction to set aside a decision where there is a fraud on the court. See Toscano v. Commissioner, 441 F.2d 930 (9th Cir. 1971); Kenner v. Commissioner, 387 F.2d 689 (7th Cir. 1968); Taub v. Commissioner, 64 T.C. 741, 751 (1975), affd. without published opinion 538 F.2d 314 (2d Cir. 1976); see also Senate Realty Corp. v. Commissioner, 511 F.2d 929 (2d Cir. 1975)). We also noted that we vacated a final decision where a clerical error was discovered after the decision had become final. Michaels v. Commissioner, 144 F.3d 495 (7th Cir. 1998), affg. T.C. Memo. 1995-294.18 Here, it is clear that there was neither fraud nor clerical error, but only respondent’s failure to include the full amount of underpayment interest in his computation of the overpayment amount. This is not grounds to give us jurisdiction to modify our final decision.19 In Wapnick v. Commissioner, 365 F.3d 131, 132 (2d Cir. 2004), the court explained the finality of Tax Court decisions, stating: section 7481 of the Internal Revenue Code provides that a decision of the Tax Court becomes final “upon the expiration of the time allowed for filing a petition for certiorari, if the decision of the Tax Court has been affirmed or the appeal dismissed by the United States Court of Appeals and no petition for certiorari has been duly filed.” 26 U.S.C. § 7481(a)(2)(A). In considering the predecessor to section 7481, the Supreme Court ruled that after an order of the Tax Court has become final the “statute deprives us of jurisdiction over the case.” R. Simpson & Co. v. Commissioner, 321 U.S. 225, 230 (1944); see also Lasky v. Commissioner, 235 F.2d 97, 99 (9th Cir. 1956). The Court recognized that “the usual rules of law applicable in court procedure must be changed” to achieve the finality needed in the realm of tax decisions. See Simpson, 321 U.S. at 228. It is suggested that the result of our opinion is inequitable and hands the estate a windfall. However, the fact that our overpayment decision in this case was appealed, affirmed, and has become final, deprives us, and any other court, of jurisdiction to modify the final decision that there was an overpayment of $238,847.24.20 This rule of finality can result in either the taxpayer’s or the Commissioner’s receiving a benefit that would not have been available had a mistake been corrected before a decision became final.21  This Court applies equitable principles in deciding the amount of a deficiency, see Woods v. Commissioner, 92 T.C. 776, 784 (1989), or the amount of an overpayment. In Bachner v. Commissioner, 109 T.C. 125, 131 n.7 (1997), we noted: In a Tax Court proceeding, either party is free to raise equity-based defenses to the assertions of the other party, and the Court, insofar as it has jurisdiction over the main claim, is free to entertain those defenses. Estate of Mueller v. Commissioner, 101 T.C. 551, 557 (1993). Here, we have jurisdiction to determine the overpayment under sec. 6512(b)(1) and, therefore, respondent is free to raise the defense provided in Lewis v. Reynolds, 284 U.S. 281 (1932). * * * However, as previously explained, once the decision in this case specifying the amount of the overpayment became final, we lost jurisdiction to modify our decision that there was an overpayment of $238,847.24.22  We have consistently held that we do not have equitable power to expand our jurisdiction. As we stated in Woods v. Commissioner, supra at 784: An historical analysis of our cases discloses numerous instances where we have applied equitable principles in deciding issues over which we had jurisdiction. For example, we have applied the equity-based principles of waiver, duty of consistency, estoppel, substantial compliance, abuse of discretion, laches, and the tax benefit rule. “While we cannot expand our jurisdiction through equitable principles, we can apply equitable principles in the disposition of cases that come within our jurisdiction.” Berkey v. Commissioner, 90 T.C. 259, 270 (1988) (Hamblen, J., concurring). [Fn. refs. omitted.23] When a Tax Court decision becomes final and there is no jurisdiction in any other Federal court, the Internal Revenue Service (IRS) does not shy away from arguing that lack of jurisdiction trumps equity. For example, in United States v. Dalm, 494 U.S. 596 (1990), the taxpayer who had been the administratrix of her former employer’s estate received substantial payments from the deceased employer’s brother. Those payments were reported on a Federal gift tax return, and the gift tax was paid by the taxpayer. Subsequently, the IRS examined the taxpayer’s income tax return for the year in which she received the payments and determined that the payments were taxable income rather than a gift. The taxpayer petitioned this Court, and we decided that the payments were taxable income. Subsequently, the taxpayer filed a claim for refund of the gift tax. The IRS denied the claim. In a subsequent litigation over the erroneously paid gift tax, the U.S. Supreme Court held that the statute deprived the District Court of jurisdiction over the action for refund of the gift tax. The Court distinguished its prior opinion in Bull v. United States, 295 U.S. 247 (1935), in which it had applied the doctrine of equitable recoupment by noting that in Bull equitable recoupment was raised as a defense to the Government’s claims in a suit over which the Court clearly had jurisdiction. The Court explained: A distinction that has jurisdiction as its central concept is not meaningless. In Bull, the executor sought equitable recoupment of the estate tax in an action for refund of income tax, over which it was undisputed that the Court of Claims had jurisdiction. See n.4, supra. All that was at issue was whether the Court of Claims, in the interests of equity, could adjust the income tax owed to the Government to take account of an estate tax paid in error but which the executor could not recover in a separate refund action. Here, Dalm does not seek to invoke equitable recoupment in determining her income tax liability; she has already litigated that liability [in the Tax Court] without raising a claim of equitable recoupment and is foreclosed from relitigating it now. See § 6512(a). * * * [United States v. Dalm, supra at 606.] Here, as in Dalm, our decision has become final. As a result, neither we nor any other court has jurisdiction to modify the decision. We hold that the estate is entitled to a refund of the $238,847.24 overpayment, plus interest on the overpayment,24 less any amounts that respondent has previously refunded with respect to the $238,847.24 overpayment. Accordingly, we shall grant the estate’s motion. An appropriate order granting the estate’s motion for proceeding to enforce overpayment determination will be entered. Reviewed by the Court. Cohen, Swift, Wells, Halpern, Chiechi, and Vasquez, JJ., agree with this majority opinion. Foley and Marvel, JJ., concur in result only.   Unless otherwise indicated, all Rule references are to the Tax Court Rules of Practice and Procedure, and all section references are to the Internal Revenue Code.    See Estate of Smith v. Commissioner, 108 T.C. 412 (1997); Estate of Smith v. Commissioner, 110 T.C. 12 (1998); Estate of Smith v. Commissioner, 198 F.3d 515, 526 (5th Cir.1999); Estate of Smith v. Commissioner, 115 T.C. 342, 348-349 (2000); Estate of Smith v. Commissioner, T.C. Memo. 2001-303; Estate of Smith v. Commissioner, 54 Fed. Appx. 413 (5th Cir. 2002).    The agreed computations were prepared pursuant to Rule 155(a), which states: Where the Court has filed or stated its opinion determining the issues in a case, it may withhold entry of its decision for the purpose of permitting the parties to submit computations pursuant to the Court’s determination of the issues, showing the correct amount of the deficiency, liability, or overpayment to be entered as the decision. If the parties are in agreement as to the amount of the deficiency or overpayment to be entered as the decision pursuant to the findings and conclusions of the Court, then they, or either of them, shall file promptly with the Court an original and two copies of a computation showing the amount of the deficiency, liability, or overpayment and that there is no disagreement that the figures shown are in accordance with the findings and conclusions of the Court. In the case of an overpayment, the computation shall also include the amount and date of each payment made by the petitioner. The Court will then enter its decision.    Advance payment totaling $646,325.76 received on Mar. 31, 1998. Of the total payment, $501,377.87 was applied towards the additional tax assessment, and $144,947.89 was applied towards the additional interest assessment made on May 12, 1998.   Respondent alleges that this represented a $20,341.20 underpayment interest abatement and $9,767.27 in interest thereon. According to respondent, he initially applied the 1992 income tax overpayment to the estate’s estate tax deficiency as of Mar. 15, 1996, but the correct date was Apr. 15,1993. In his response to the estate’s motion, respondent explains: This amount was abated as a result of applying the $63,052 income tax overpayment credit to the correct date (April 15, 1993). This amount, plus interest of $9,767.27, was refunded to petitioner on October 6, 2003. Until October 6, 2003, the credit was incorrectly applied effective March 15, 1996.    In its motion, the estate refers to $85,337.83. However, it is clear that the estate made a mathematical error, and the correct figure is $85,336.83.    Sec. 6512(b)(1) provides: SEC. 6512(b). Overpayment Determined by Tax Court.— (1) JURISDICTION to DETERMINE. — Except as provided by paragraph (3) and by section 7463, if the Tax Court finds that there is no deficiency and further finds that the taxpayer has made an overpayment of income tax for the same taxable year, of gift tax for the same calendar year or calendar quarter, of estate tax in respect of the taxable estate of the same decedent, or of tax imposed by chapter 41, 42, 43, or 44 with respect to any act (or failure to act) to which such petition relates for the same taxable period, in respect of which the Secretary determined the deficiency, or finds that there is a deficiency but that the taxpayer has made an overpayment of such tax, the Tax Court shall have jurisdiction to determine the amount of such overpayment, and such amount shall, when the decision of the Tax Court has become final, be credited or refunded to the taxpayer. If a notice of appeal in respect of the decision of the Tax Court is filed under section 7483, the Secretary is authorized to refund or credit the overpayment determined by the Tax Court to the extent the overpayment is not contested on appeal.    As we have previously stated: Overpayment jurisdiction depends on whether we have jurisdiction to find that “there is no deficiency” or “that there is a deficiency.” Barton v. Commissioner, 97 T.C. 548, 552 (1991). Respondent has issued a notice of deficiency containing a determination that petitioner is liable for deficiencies in income tax for 1988 through 1991. Petitioner filed a timely petition. Therefore, we have jurisdiction and are required to find that there either is or is not a deficiency for each of the years 1988 through 1991. Estate of Baumgardner v. Commissioner, 85 T.C. 445, 448 (1985). It follows that we also have jurisdiction to determine whether petitioner has made over-payments of income tax for the same years. Sec. 6512(b); Barton v. Commissioner, supra at 552. [Winn-Dixie Stores, Inc. & Subs. v. Commissioner, 110 T.C. 291, 295 (1998).]    The only reference to “overpayment” in subch. B of ch. 63 is in sec. 6214(e) which provides: “For provision giving Tax Court jurisdiction to order a refund of an overpayment and to award sanctions, see section 6512(b)(2).”    In Estate of Baumgardner v. Commissioner, 85 T.C. 445, 452 (1985), we stated: “Interest may be part of an overpayment if the interest accrued and was paid prior to the time the overpayment was claimed or arose.”    The Chief Counsel’s National Office has acknowledged in field service advice that As explained in Winn-Dixie Stores, Inc. v. Commissioner, 110 T.C. 291 (1998), the Tax Court has jurisdiction to determine overpayments of income tax. I.R.C. § 6512(b). Because I.R.C. § 6601(e)(1) provides that interest shall be treated as a tax, an overpayment of tax includes any interest that is part of such overpayment. The statutory exception in I.R.C. § 6601(a) [sic] that excludes interest as a tax for purposes of determining a deficiency under I.R.C. § 6211(a) does not apply to overpayments. As long as the Service has determined a deficiency in tax for the years at issue, the Tax Court has jurisdiction to determine an overpayment of tax, including interest, for those years. Estate of Baumgardner, 85 T.C. 445 (1986). [Field Serv. Adv. 1999-24017 (June 18, 1999).] In Field Service Advice 2000-01003 (Jan. 7, 2000), the Chief Counsel’s National Office explained: Code section 6512(b) defines the Tax Court’s jurisdiction to determine overpayments. In general, the court has jurisdiction to determine the amount of an overpayment in income tax for a taxable year where it finds “that there is no deficiency and further finds that the taxpayer has made an overpayment of income tax for the same taxable year,” or where the court finds “there is a deficiency but that the taxpayer has made an overpayment of such tax.” Id., § 6512(b)(1). Further, in determining whether X Corp has overpaid its taxes, the court has jurisdiction to determine whether X Corp overpaid interest by virtue of its entitlement to a zero interest rate on underpayments for the years before the court. Winn-Dixie Stores, Inc. v. Commissioner, 110 T.C. 291 (1998). * * *    See Goettee v. Commissioner, T.C. Memo. 2003-43, where we observed: Section 6512(b) provides, inter alia, that if a taxpayer properly invokes our overpayment jurisdiction under section 6512(b), then we have jurisdiction to determine the amount of the taxpayer’s overpayment. This jurisdiction under section 6512 also permits us to redetermine a taxpayer’s statutory interest. Lincir v. Commissioner, 115 T.C. 293, 298 (2000), affd. 32 Fed. Appx. 278 (9th Cir. 2002); see Zfass v. Commissioner, 118 F.3d 184, 192 n.9 (4th Cir. 1997), affg. T.C. Memo. 1996-167.    The Chief Counsel’s National Office addressed the meaning of the term “overpayment” and our overpayment jurisdiction to determine underpayment interest in field service advice: The [Tax] Court does have jurisdiction to consider alleged overpayments of underpayment interest as part of its overpayment jurisdiction. Such excessive interest, once assessed and paid, becomes part of an overpayment, i.e., a payment in excess of that which is properly due. Jones v. Liberty Glass Co., 332 U.S. 524, 531 (1947); Baumgardner v. Commissioner, 85 T.C. 445 (1985). At the time of the overpayment, previous payments of tax and previous payments of interest merge to become the refundable amount of the overpayment, regardless of their previous designation as tax or interest. Baumgardner, at 457-58; see also section 6601(e)(1); Alexander Proudfoot Co. v. United States, 454 F.2d 1379, 1383 (1972) (“deficiency interest . . . has been deemed an integral part of the tax”); Barton v. Commissioner, 97 T.C. 548 (1991) (Tax Court has jurisdiction to consider overpayment of interest under former section 6621(c) even though it does not have jurisdiction over a proposed determination of yet-to-be assessed and paid underpayment interest). s¡s sfc sis :¡. j¡' s}: Thus, in Winn-Dixie Stores, Inc. v. Commissioner, 110 T.C. 291 (1998), the court held that it had jurisdiction to consider the effect of the Service’s failure to honor the taxpayer’s request that the Service credit overpayments of tax from other tax years against the proposed liabilities before the court because such crediting would have reduced the amount of underpayment interest due from the taxpayer on the deficiencies. Critical to the Court’s exercise of jurisdiction was the taxpayer’s payment of the tax plus the underpayment interest determined by the Service before the taxpayer asked the court to determine an overpayment of tax, including underpayment interest. Field Serv. Adv. 2000-12049 (Mar. 24, 2000).    The estate cites this regulation in its motion. In respondent’s response to the motion, respondent neither cites nor argues against the applicability of this regulation. In Estate of Baumgardner v. Commissioner, 85 T.C. at 451-452, we cited the aforementioned regulation in support of our jurisdiction to consider underpayment interest as part of our overpayment jurisdiction. In the 19 years following our Estate of Baumgardner Opinion, the Commissioner has not modified this regulatory definition of an “overpayment”.    The Chief Counsel’s National Office echoes this position in field service advice: “Although payments of underpayment interest are not considered in determining a deficiency, they can be weighed in determining whether an overpayment exists.” Field Serv. Adv. 2000-12049 (Mar. 24, 2000).    We have held that in making an overpayment determination, the tax which is “properly due” is the correct amount of tax, regardless of whether the correct tax has been or could be assessed at the time of our decision. See Bachner v. Commissioner, 109 T.C. 125 (1997), affd. without published opinion 172 F.3d 859 (3d Cir. 1998), where we found there was no overpayment of the taxpayer’s proper tax even though the statute of limitations barred assessment of that tax for the year in issue. We relied on the holding in Lewis v. Reynolds, 284 U.S. 281, 283 (1932), wherein the Court stated: An overpayment must appear before refund is authorized. Although the statute of limitations may have barred the assessment and collection of any additional sum, it does not obliterate the right of the United States to retain payments already received when they do not exceed the amount which might have been properly assessed and demanded. Bachner was decided on remand from the Court of Appeals for the Third Circuit, which had held that the question of whether there was an overpayment was an issue that was independent of whether there was a deficiency. Bachner v. Commissioner, 81 F.3d 1274, 1279 (3d Cir. 1996).    In field service advice, the Chief Counsel’s National Office states: At the time of the overpayment, previous payments of tax and previous payments of interest merge to become the refundable amount of the overpayment, regardless of their previous designation as tax or interest. [Field Serv. Adv. 2000-12049 (Mar. 24, 2000).]    In an opinion issued before the enactment of sec. 6512(b)(4), the Court of Appeals for the Second Circuit observed: These provisions [regarding our deficiency jurisdiction], taken together with § 6512(b)(1), authorize the Tax Court definitively to determine the amount of any deficiency and overpayment for a taxable year brought before it by a taxpayer petition, and provide for the court to take into account any prior § 6402(a) application of that overpayment as a credit envisioned by § 6512(b)(1), but militate strongly against an interpretation that a prior § 6402(a) application of the overpayment divests the Tax Court of jurisdiction to perform its § 6512(b)(1) obligation to determine the amount of the overpayment. * * * [Belloff v. Commissioner, 996 F.2d 607, 613 (2d Cir. 1993), affg. T.C. Memo. 1991-350.]    In Cinema ’84 v. Commissioner, 122 T.C. 264 (2004), we noted that the Court of Appeals for the Sixth Circuit had previously held that a final decision of the Tax Court could he vacated in situations involving mutual mistake, see Reo Motors, Inc. v. Commissioner, 219 F.2d 610 (6th Cir. 1955), but that in a more recent case, Harbold v. Commissioner, 51 F.3d 618, 622 (6th Cir. 1995), the Court of Appeals for the Sixth Circuit held that Reo Motors, Inc. was overruled by the Supreme Court in Lasky v. Commissioner, 352 U.S. 1027 (1957), and that the Court would no longer follow the rationale of Reo Motors, Inc.    In Stamm Intl. Corp. v. Commissioner, 90 T.C. 315 (1988), the Commissioner sought relief from a settlement agreement because “the computations for entry of decisions” resulted in less than the Commissioner expected due to his miscalculations. Id. at 320. In denying the Commissioner’s motion, we noted that the considerations involved in whether to grant relief from the settlement agreement were “akin to those involved in vacating a judgment entered by consent. In such cases, the parties are held to their agreement without regard to whether the judgment is correct on the merits.” Id. at 322.    Sec. 6512(a) generally deprives any other court from taking jurisdiction to determine an overpayment if the taxpayer has filed a petition in the Tax Court. The origin of sec. 6512(a), as applied to estate taxes, is sec. 319(a) of the Revenue Act of 1926, ch. 27, 44 Stat. (Part 2) 84. S. Rept. 52, 69th Cong., 1st Sess. (1926), 1939-1 C.B. (Part 2) 332, 351, explains the reasons for the enactment of sec. 319(a) of the Revenue Act of 1926 as follows: But if he [taxpayer] does elect to file a petition with the Board his entire tax liability for the year in question (except in case of fraud) is finally and completely settled by the decision of the Board when it has become final, whether the decision is by findings of fact and opinion, or by dismissal, as in case of lack of prosecution, insufficiency of evidence to sustain the petition, or on the taxpayer’s own motion. The duty of the Commissioner to assess the deficiency thus determined is mandatory, and no matter how meritorious a claim for abatement of the assessment or for refund he can not entertain it, nor can suit be maintained against the United States or the collector. Finality is the end sought to be attained by these provisions of the bill, and the committee is convinced that to allow the reopening of the question of the tax for the year involved either by the taxpayer or by the Commissioner (save in the sole case of fraud) would be highly undesirable. See Estate of Bailly v. Commissioner, 81 T.C. 949, 955 n.10 (1983).    For a discussion of the hardships that can result from the rules governing finality, see Estate of Bailly v. Commissioner, supra.    Sec. 7481(c) allows only a taxpayer (not the Commissioner) to file a motion for the redeter-mination of interest under certain circumstances. The estate’s motion before us is based on sec. 6512(b). Respondent makes no argument that sec. 7481(c) has any relevance to the estate’s motion. Indeed, the 1997 legislative history regarding sec. 7481(c) specifically states: In clarifying the Tax Court’s jurisdiction over interest determinations, the conferees do not intend to limit any other remedies that taxpayers may currently have with respect to such determinations, including in particular refund proceedings relating solely to the amount of interest due. [H. Conf. Rept. 105-220, at 733 (1997), 1997-4 C.B. (Vol. 2) 1457, 2203.] A proceeding under sec. 6512(b) is one of the “other remedies” that taxpayers had. In field service advice, the Chief Counsel’s National Office has recognized that the Tax Court has jurisdiction under sec. 6512(b) to consider alleged overpayments of underpayment interest and that the Tax Court has auxiliary jurisdiction under section 7481(c) to determine whether the taxpayer has made an overpayment of interest or the Service has underpaid interest based upon a deficiency or overpayment decision entered by the court * * * [Field Serv. Adv. 2000-12049 (Mar. 24, 2000); emphasis added.]    In Commissioner v. McCoy, 484 U.S. 3, 6 (1987), the Supreme Court held that in an appeal of a Tax Court decision, the appellate court’s authority was restricted to reviewing those matters over which the Tax Court had jurisdiction and that the Court of Appeals could not expand its own jurisdiction because the Court of Appeals believed it was necessary “in order to achieve a fair and just result.”    Interest on “overpayments” is provided for by sec. 6611.