James C. and Jane A. Wetzel - Page 2

                                        - 2 -                                          
               Respondent determined a deficiency in petitioners' Federal              
          income tax for the taxable year 1992 in the amount of $315.                  
          Petitioners resided in Hinckley, Ohio, at the time they filed                
          their petition.                                                              
               The issue is whether petitioners are entitled to offset                 
          against a deficiency in income tax an overpayment that was                   
          previously applied to a different liability.                                 
                                  FINDINGS OF FACT                                     
               The facts are not disputed and may be summarized as follows.            
          Petitioners filed a 1992 joint Federal income tax return                     
          indicating that they were entitled to a refund in the amount of              
          $475 (the $475 overpayment).  Respondent applied the $475                    
          overpayment against an outstanding liability determined under                
          section 6672 pursuant to the authority granted in section                    
          6402(a).2  Subsequently, respondent determined a deficiency in               
          petitioners' 1992 Federal income tax in the amount of $315.  The             
          parties agree that petitioners are entitled to a credit of $150              
          for income tax withheld to be offset against the deficiency.                 
          Petitioners do not otherwise dispute the deficiency                          
          determination.  Thus, disregarding the propriety of the treatment            
          of the $475 overpayment, the parties agree that petitioners                  

          2    As relevant here, sec. 6402(a) provides:  "In the case of               
          any overpayment, the Secretary * * * may credit the amount of                
          such overpayment * * * against any liability in respect of an                
          internal revenue tax on the part of the person who made the                  
          overpayment and shall * * * refund any balance to such person."              

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