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of tax paid through withholding over the correct amount of tax
that was properly due, regardless of the fact that the
Commissioner was time barred from assessing the proper tax. The
taxpayer argued that we could not reduce any overpayment by
considering unassessed tax liabilities which were barred by the
statute of limitations on assessment. We agreed with the
Commissioner, holding:
Under the principles established by the Supreme
Court in Lewis v. Reynolds, 284 U.S. 281 (1932), a
taxpayer's claim for refund must be reduced by the
amount of the correct tax liability for the taxable
year, regardless of the fact that the Commissioner can
no longer assess any deficiency for the taxable year.
* * * [Bachner v. Commissioner, 109 T.C. at 130.]
A literal reading of the statutes in issue avoids this potential
for raising issues other than those related to the section 183
activity.
Finally it has been suggested that the provisions of section
183(e)(4) in combination with the taxpayer's unilateral election
under section 183(e) constitute an "agreement" between the
taxpayer and the Commissioner within the meaning of section
6501(c)(4). But there is no requirement in section 183(e) that
the taxpayer and the Commissioner agree and execute a written
extension agreement, and no such agreement was executed in this
case. A statutory provision mandating an enlargement of "the
statutory period for the assessment of any deficiency" is not an
"agreement", and there is nothing in the statute or the
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