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Nonrebate refunds, on the other hand, are issued to
taxpayers because of clerical or computer errors, and they bear
no relation to a recalculation of tax liability. See O’Bryant v.
United States, supra; Clayton v. Commissioner, T.C. Memo. 1997-
327. A hallmark of nonrebate refunds is that, unlike rebate
refunds, nonrebate refunds are always erroneous. Examples of
nonrebate refunds are refunds issued because the Commissioner
credited a taxpayer’s payment twice or the Commissioner applied a
payment to the wrong tax year. The Commissioner is limited to
erroneous refund actions under section 7405 to recover nonrebate
refunds. The deficiency procedures are not available to the
Commissioner to recover nonrebate refunds because of the
definition of “deficiency” in section 6211(a): A “deficiency” is
the amount by which the tax actually imposed exceeds--
(1) the sum of
(A) the amount shown as the tax by the
taxpayer upon his return, if a return was
made by the taxpayer and an amount was shown
as the tax by the taxpayer thereon, plus
(B) the amounts previously assessed (or
collected without assessment) as a
deficiency, over--
(2) the amount of rebates, as defined in
subsection (b)(2), made. [Emphasis added.]
In Lesinski v. Commissioner, T.C. Memo. 1997-234, we held we do
not have jurisdiction over nonrebate refunds.
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