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concessions by respondent, the sole issue now before us is the
allowable amount of recovery by petitioners for litigation costs
under section 7430.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time the petition
was filed, petitioners resided in San Antonio, Texas.
Background
In 1991, the Internal Revenue Service (IRS) levied upon an
individual retirement account (IRA) owned by petitioner Charles
Russell (Mr. Russell). At the time of the levy, Mr. Russell's
IRA contained funds in the amount of $23,477.
Though the statutory period of limitations had run under
section 6502, the IRS still levied upon Mr. Russell's IRA account
and applied the $23,477 amount to a 1981 civil penalty assessed
against Mr. Russell on May 17, 1982.
Following the levy, Mr. Russell continued to make payments
to the IRS with respect to the 1981 civil penalty. On May 11,
1995, Mr. Russell filed Form 843, Claim for Refund, requesting a
refund of all payments made to the IRS on the grounds that
collection of the 1981 civil penalty was barred by the expiration
of the statutory period of limitations.
The IRS refunded part of Mr. Russell's payments but
contended that section 6511 limited any allowable refund to
payments made within 2 years before the filing of such claim.
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