Donald R. Cooley and Cathy A. Cooley - Page 26

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              Respondent issued the notice of deficiency on April 4, 2000,            
         and the two notices of determination on August 8, 2000.  When                
         respondent issued the two notices of determination, respondent               
         was aware that petitioners’ income tax for their 1992 taxable                
         year was $39,498.02.  Respondent’s records show that petitioners             
         paid at least $42,714.42 for their 1992 taxable year, and,                   
         therefore, petitioners overpaid their taxes by $3,216.40 for                 
         their 1992 taxable year.                                                     
              We conclude from our analysis of respondent’s records that              
         the Appeals officer did not properly consider petitioners’                   
         payments for the 1992 taxable year against their liabilities in              
         issue which respondent seeks to collect.  Petitioners may                    
         challenge the existence or amount of their underlying tax                    
         liability pursuant to section 6330(c)(2)(B),10 which includes                
         their “self-assessed” liabilities reported on their amended                  
         returns.  Montgomery v. Commissioner, 122 T.C. __ (2004)(slip op.            
         at 11-12).  Consequently, we remand the instant case to the                  
         Appeals officer to credit petitioners’ $3,216.40 payment against             
         the liabilities in issue.                                                    


              10Sec. 6330(c)(2)(B) provides:                                          
              (B) Underlying liability.–-The person may also raise at the             
                    hearing challenges to the existence or amount of the              
                    underlying tax liability for any tax period if the                
                    person did not receive any statutory notice of                    
                    deficiency for such tax liability or did not otherwise            
                    have an opportunity to dispute such liability.                    






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