- 10 -
determined that Sunrise was not a separate entity. We agree with
respondent.
In Bachner v. Commissioner, 109 T.C. 125, 130-131 (1997),
affd. without published opinion 172 F.3d 859 (3d Cir. 1988), we
stated:
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.
In Lewis v. Reynolds, supra, the taxpayer filed a claim
for refund alleging that certain deductions had been
improperly disallowed by the Commissioner after the
period of limitations on additional assessment had
expired. The Commissioner agreed with the taxpayer
that the period of limitations had expired but denied a
refund on the basis that the correct computation of tax
resulted in additional tax. The taxpayer argued that
the Commissioner lacked the authority to redetermine
the tax after the period of limitations had expired.
The Supreme Court disagreed.
While no new assessment can be made, after
the bar of the statute has fallen, the
taxpayer, nevertheless, is not entitled to a
refund unless he has overpaid his tax. * * *
* * * * * * *
An overpayment must appear before refund is
authorized. Although the statue of
limitations may have barred the assessment
and collection of any additional sum, it does
not obliterate the right to the United States
to retain payments already received when they
do not exceed the amount which might have
been properly assessed and demanded. [Lewis
v. Reynolds, supra at 283.]
The doctrine established in Lewis v. Reynolds,
supra, has been applied by this Court in the
determination of an overpayment. See Connecticut Light
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