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B. Petitioner’s Separation and Filing of Separate Returns
Petitioner and his wife separated in September 1986. They
filed separate returns for 1986 and 1987.
Petitioner reported a tax liability of $11,985 on his 1986
return. In 1987, petitioner requested that respondent: (1)
Credit $11,985 of the $150,000 payment to his liability for 1986;
(2) credit $70,000 to his estimated tax for 1987; and (3) refund
$68,015. On November 23, 1987, respondent (1) credited $70,000
to petitioner’s tax liability for 1987, and (2) refunded $68,015
to petitioner.
C. Respondent’s 1988 Reallocation of the $150,000 Payment
As of April 1988, respondent had credited $81,985 of the
$150,000 payment to petitioner’s 1986 and 1987 tax years and
refunded $68,015 to petitioner. Despite that, in April 1988, the
accountant for petitioner’s wife asked respondent to allocate the
$150,000 payment in proportion to the tax liability of each
spouse for 1986. In April or May 1988, respondent allocated
$14,471.10 of the $150,000 estimated tax payment to petitioner
and $135,582.90 to his wife. Respondent’s position now is that
the $68,015 refund was erroneous, but that the time provided to
respondent under section 6532(b) to sue to recover an erroneous
refund has expired.
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Last modified: May 25, 2011