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law to pay that tax on the date the return was filed. That tax
was paid, as shown on the return, by taxes withheld, a cash
payment petitioner submitted with the return, and the amount of
$2,899.89 to be taken from proceeds of a levy that petitioner
identified on her return. At the time petitioner's 1987 return
was filed, there were no other outstanding assessments against
her as to which respondent could have applied the amount at
issue. In view of these facts and circumstances, we conclude
that respondent should have applied the $2,899.89 levy proceeds
identified on the return toward payment of the tax shown on that
return filed by petitioner. Respondent has given no factual
reason and no legal basis for disallowing this amount as a
payment and later applying such amount toward payment of a
subsequently assessed tax liability. Petitioner is sustained on
this issue.
As to the second part of this issue, petitioner contended
that the $2,884 disallowed as a payment by respondent in the
notice of deficiency represented the proceeds of another levy on
a different bank account, and that the $2,884 should be allowed
to her as an additional credit. Petitioner failed to establish
that there was such a levy. Respondent's transcript did not
reflect that such proceeds were realized through levy, other than
the amounts listed earlier in this opinion. Petitioner presented
no evidence from the bank or savings institution from which she
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