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petitioner on April 15, 1985. As the Court of Appeals for the
Third Circuit in the instant case noted: "There is ample basis
to find unpersuasive Bachner's view of wage withholdings as
'deposits,' refundable merely upon late assessment." Bachner v.
Commissioner, 81 F.3d at 1278-1279 (citing Ehle v. United States,
720 F.2d 1096, 1097 (9th Cir. 1983)); see Binder v. United
States, 590 F.2d 68, 70-71 (3d Cir. 1978).
Petitioner argues that he is entitled to a refund of all his
withholding credits for his 1984 tax year because respondent
failed to properly assess the tax within the statutory period of
limitations provided by section 6501. However, whether or not
there has been a timely assessment with respect to a specific
year does not alone determine whether there has been an
overpayment which would entitle a taxpayer to a refund. As the
Court of Appeals for the Third Circuit stated:
The language in � 6501 refers only to 'limitations on
assessment and collection,' and the operative clause of
� 6501(a) directs only that taxes 'be assessed within 3
years after the return was filed.' * * * A deficiency
determination, by which the IRS seeks to establish the
taxpayer's additional tax liability, is patently
different from a refund determination, by which the
taxpayer seeks repayment or credit from the IRS."
[Bachner v. Commissioner, supra at 1277.]
Under the principles established by the Supreme Court in
Lewis v. Reynolds, 284 U.S. 281 (1932), a taxpayer's claim for
refund must be reduced by the amount of the correct tax liability
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