- 12 - return. I.R.C. �6651(b) does not state the tax shall be reduced by any payment of tax eventually claimed on the return as it does when I.R.C. �6651(b) addresses immediately after the above-quoted section the amount of any credit claimed on the return. Accordingly, neither the Internal Revenue Service nor this Court may ignore the statutory language which states such tax payments by Ron Mason “shall” reduce the tax upon which the penalty is calculated. Thus, Ron Mason’s tax liability for 1996 must be reduced by the 1995 tax liability for 1996. If there is no tax liability for 1996 then there is [sic] no additions to tax under I.R.C. ��6651(a)(1) and (a)(2). * * * The short answer to the above-quoted argument of petitioner is that although petitioner overpaid his tax liability for 1995, he is barred by the statute of limitations from applying that overpayment as a credit to his tax liability for taxable year 1996, see sec. 6511(b)(2)(A), and the parties so stipulated. The parties also stipulated that petitioner underpaid his tax for his taxable year 1996 in the amount of $40,882.69. The long answer to petitioner’s argument is that petitioner misconstrues section 6651(b). Contrary to the contentions of petitioner, section 6651(b) is not “the subsection which actually imposes the I.R.C. ��6651(a)(1) and (a)(2) penalties.” As pertinent here, section 6651(b) states: SEC. 6651. FAILURE TO FILE TAX RETURN OR TO PAY TAX. (b) Penalty Imposed on Net Amount Due.–-For pur- poses of-- (1) subsection (a)(1), the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax andPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011