Faramarz Fayeghi and Shelli Fayeghi - Page 11

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          issuance of a notice of deficiency.  See Terry v. Commissioner,             
          91 T.C. 85, 87 (1988); Owens v. Commissioner, 50 T.C. 577, 583              
          (1968), and cases cited therein.                                            
               Here, respondent treated petitioners' amended return as an             
          informal claim for abatement.  Further, following an examination            
          of petitioners' 1990 tax return, respondent considered and                  
          rejected the merits of the claim, as evidenced by the discussion            
          of the matter in the 30-day letter that respondent issued to                
          petitioners on December 31, 1995.  We agree with respondent that            
          the rejection of a claim for refund or abatement in an amended              
          return does not convert the disallowed claim into a deficiency.             
          See Koch v. Alexander, 561 F.2d 1115, 1117-1118 (4th Cir. 1977);            
          see also Curry v. United States, 774 F.2d 852, 854 n.1 (7th Cir.            
               Petitioners further contend that the Court could treat their           
          amended return as the equivalent of a rebate within the meaning             
          of section 6211(b)(2).3  Petitioners suggest that their amended             
          return "essentially * * * effects a repayment of a previous                 
          liability."  We disagree.  Considering the reality that                     

          3  The term "rebate" is defined in sec. 6211(b)(2) as                       
                    (2) The term "rebate" means so much of an                         
               abatement, credit, refund, or other payment, as was                    
               made on the ground that the tax imposed by subtitle A                  
               or B or chapter 41, 42, 43, or 44 was less than the                    
               excess of the amount specified in subsection (a)(1)                    
               over the rebates previously made.                                      

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