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Petitioner had overpaid tax for its 1984 and 1987 tax years.
Petitioner had underpaid tax for 1988 through 1991. Respondent
did not offset the overpayments for 1984 and 1987 against the
underpayments for 1988 through 1991. Respondent argues that such
offsets are discretionary under section 6402(a) and that section
6512(b)(4) operates to deny the Tax Court jurisdiction to make a
determination based on the propriety of the Secretary's exercise
of discretion under section 6402.
Section 6512(b) generally defines this Court's jurisdiction
to determine overpayments. Section 6512(b)(4), was added to the
Code by section 1451(b) of the Taxpayer Relief Act of 1997, Pub.
L. 105-34, 111 Stat. 788, 1054. Section 6512(b)(4) provides:
"The Tax Court shall have no jurisdiction under this subsection
to restrain or review any credit or reduction made by the
Secretary under section 6402."
Section 6512(b)(4) restricts our jurisdiction in two
situations. First, we may not restrain or prevent respondent
from reducing a refund by way of credit or reduction pursuant to
section 6402. Second, we may not review the validity or merits
of any reduction of a refund under section 6402 after such a
reduction has been made by respondent.3 Neither of these
3The legislative history of sec. 6512(b)(4) comports with
this reading. In reference to the new amendment to sec. 6512(b),
committee reports provide that "The bill also clarifies that the
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Last modified: May 25, 2011