- 12 -
existed in 1992. When the checks were delivered to petitioner in
December of 1992, they were payable only to petitioner, and none
of the documents and orders involved in the various proceedings
contained any indication of any condition or limitation imposed
upon petitioner’s receipt of the checks. Petitioner had
unfettered control over the checks in 1992 but returned them.
Thus, the money was not restricted, and petitioner’s failure to
benefit from the amounts represented by the checks resulted from
the exercise of her own choice. Therefore, we conclude that
petitioner constructively received the backpay and interest on
backpay in 1992.12
12Petitioner had $31,042.86 in Federal income taxes withheld
from the two checks issued to her for backpay and interest on
backpay. Assuming arguendo that petitioner was correct and that
she did not constructively receive the checks for backpay and
interest on backpay in 1992, petitioner would have overpaid her
1992 Federal income taxes.
The Tax Court has jurisdiction to award to a taxpayer a
refund of overpaid taxes if the Commissioner issued the notice of
deficiency within the later of 2 years after the tax was paid or
3 years after the return was filed. See secs. 6511(b)(2)(A) and
(B) and 6512(b)(3)(B); Commissioner v. Lundy, 516 U.S. 235,
241-242 (1996). The 2-year period applies (and the 3-year period
does not) if the taxpayer did not file his or her income tax
return before the Commissioner issued a notice of deficiency for
that year. See secs. 6511(b)(2)(B) and 6512(b)(3); Commissioner
v. Lundy, supra at 243. Petitioner did not file a tax return for
1992.
Respondent mailed the notice of deficiency on Aug. 28, 1997.
We may order a refund of any overpayments petitioner made within
the 2 years preceding Aug. 28, 1997. Petitioner’s payments of
taxes for 1992 were made by the district through withholding.
(continued...)
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