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allocation it chooses. See Estate of Baumgardner v.
Commissioner, 85 T.C. 445, 459 (1985). The taxpayer does have a
right to direct his or her voluntary payment but must make the
request or designation how the money is to be applied. See Wood
v. United States, 808 F.2d 411, 416 (5th Cir. 1987); Muntwyler v.
United States, 703 F.2d 1030, 1032 (7th Cir. 1983); Estate of
Baumgardner v. Commissioner, supra at 459-460.
In the case at hand, petitioners did not designate on the
check or otherwise where they wanted the funds to be applied.
Respondent made the allocation to the 1994 tax year. In 1997,
when the 1994 return was filed, respondent refunded the $10,000
along with the excess withholding to petitioners. Petitioners
claimed on their 1995 return an estimated tax payment or
carryover from the 1994 return of $10,000. However, respondent
had not yet received petitioners’ 1994 return. Lastly,
petitioners’ contention that the $10,000 payment should be
applied to the tax deficiency with the excess refunded to them is
absurd, since the $10,000 has already been refunded to them.5
On the basis of this record, we hold that respondent did not
err in allocating petitioners’ voluntary undesignated payment to
5 Under the circumstances presented to the Court,
petitioner should consider himself fortunate that we have not
imposed a penalty for raising frivolous issues. See sec.
6673(a).
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Last modified: May 25, 2011