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3. Petitioner’s Entitlement to Credits or Refunds of the 1988
and 1989 Overpayments
Although we have determined that an overpayment exists, our
jurisdiction to order a refund or credit of an overpayment is
limited and depends upon when the taxes were paid. See secs.
6511(a) and (b) and 6512(b); Commissioner v. Lundy, 516 U.S. 235
(1996). The withholding taxes making up the overpayments for
1988 and 1989 are deemed paid on April 15, 1989, and April 15,
1990, respectively. See sec. 6513(b)(1). Under section
6512(b)(3), we may order the credit or refund of an overpayment
only if one of three conditions is met. The first condition, set
out in section 6512(b)(3)(A), requires that the tax be paid after
the mailing of the notice of deficiency, which did not occur
here.
The second condition, set out in section 6512(b)(3)(B),
allows a credit or refund of an overpayment if a claim for refund
deemed filed on the date the notice of deficiency was mailed
would have constituted a timely claim for refund of the overpaid
amount under applicable limitations periods prescribed in section
6511(b)(2), (c), or (d). Since the returns for 1988 and 1989
filed by petitioner on October 4, 1993, each sought a refund,
petitioner made actual claims for refund for both years more than
19 months earlier than a claim deemed filed, pursuant to section
6512(b)(3)(B), on the date of the May 11, 1995, notice of
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