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year in issue.
B. Interest Income
Petitioners overpaid their income tax for 1993. After a
portion of the overpayment was apparently paid to another Federal
agency, see sec. 6402(d), a balance of $1,077.98 remained as a
credit in petitioners’ account. Of this amount, $726.39 was
subsequently applied against petitioners’ Federal income tax
liability for 1996, thereby leaving a balance of $351.59. In
this regard, petitioners received a notice from respondent dated
October 6, 1997, explaining how respondent applied the
overpayment. This notice stated, in part, as follows:
How We Applied Your Overpayment
Amount Of Overpaid Tax On Your Return . . . . . $1,077.98
Amount Of Interest You Earned on Overpayment. . $.00
Total Amount Due You . . . . . . . . . . . . . $1,077.98
Total Amount Applied . . . . . . . . . . . . . $726.39
Amount You Will Receive As A Refund . . . . . . $351.59
(Any Interest Due You Will Be Added)
On or about October 6, 1997, respondent issued a refund
check to petitioners in the amount of $663.43. This amount
consisted of tax in the amount of $351.59 and interest in the
amount of $311.84.3
3 Respondent’s transcript of petitioner’s account for 1993
shows that petitioners were credited with interest on the
overpayment for 1993 as follows:
(continued...)
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