110 T.C. No. 23
UNITED STATES TAX COURT
WINN-DIXIE STORES, INC. AND SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 26236-95, 27027-96, Filed April 27, 1998.
5382-97.
R determined deficiencies in P's taxable years
1988 through 1993. P agreed in part with R's
determinations for 1988 through 1991 and entered into
an agreement with R regarding the uncontested amounts.
R also determined overpayments of tax for 1984 and
1987, which are not before the Court. R refunded the
1984 and 1987 overpayments plus interest. P claims
that R should have honored P's request to credit the
overpayments for 1984 and 1987 against the agreed
underpayments for 1988 through 1991 pursuant to R's
authority to offset under sec. 6402(a), I.R.C.
Interest on underpayments is computed at a higher rate
than interest on overpayments. However, when R
exercises his authority under sec. 6402(a), I.R.C.,
sec. 6601(f), I.R.C., provides that there shall be no
interest due for the period of mutual indebtedness.
Had R used the overpayments to offset the agreed
underpayments, P's liability attributable to the agreed
underpayments would have been substantially less. P
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