- 4 - Petitioners contend that, even though they incorrectly reported the amount of their wage and salary income on page 1 of their return, the second page of their return and their computation of tax was based on the correct amount of their wage and salary income but admittedly did not include the $198 in dividend and interest income. Therefore, petitioners contend that, since respondent remitted $2,426 to them as the refund of an overpayment, respondent is precluded from issuing a notice of deficiency simply to rectify an error that respondent committed. Petitioners further contend that the interest on the deficiency should be abated if they are held liable for the amount of the deficiency because the refund was based on an error by respondent. The law is well settled that the granting of a refund does not preclude the Commissioner from issuing a notice of deficiency to recover the refund. See Gordon v. United States, 757 F.2d 1157, 1160 (11th Cir. 1985); Beer v. Commissioner, 733 F.2d 435, 437 (6th Cir. 1984), affg. T.C. Memo. 1982-735; Warner v. Commissioner, 526 F.2d 1, 2 (9th Cir. 1975), affg. T.C. Memo. 1974-243. The taxpayers in Gordon v. United States, supra, and in Warner v. Commissioner, supra, made the same argument that petitioners are making here; i.e., that the Commissioner should not be allowed to make refunds and then demand repayment. To this argument, the Courts of Appeals stated: "'Alas, thePage: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011