Estate of Algerine Allen Smith, Deceased, James Allen Smith, Executor - Page 1

                                   123 T.C. No. 2                                     


                               UNITED STATES TAX COURT                                


            ESTATE OF ALGERINE ALLEN SMITH, DECEASED, JAMES ALLEN SMITH,              
                               EXECUTOR, Petitioner v.                                
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 19200-94.              Filed July 13, 2004.                 
                    On Jan. 24, 2002, the Court entered a decision                    
               that there was an overpayment of $238,847.24 regarding                 
               E’s estate tax liability, which amount was paid after                  
               the mailing of the notice of deficiency.  That decision                
               is now final.  R issued refunds to E which were less                   
               than the overpayment amount and interest thereon.  R                   
               alleges that the refund was less than the $238,847.24                  
               overpayment and interest thereon because, after our                    
               decision became final, and pursuant to sec. 6402(a),                   
               I.R.C., he applied $85,336.83 of the $238,847.24                       
               overpayment to assessed but unpaid interest that had                   
               accrued on E’s estate tax deficiency prior to the date                 
               of payment (underpayment interest).  E filed a motion                  
               to enforce our overpayment determination pursuant to                   
               sec. 6512(b)(2), I.R.C., and Rule 260, Tax Court Rules                 
               of Practice and Procedure.                                             
                    Held:  An overpayment means any payment of tax in                 
               excess of the tax which is properly due.  For purposes                 
               of determining the amount of an overpayment, the term                  
               “tax” includes any underpayment interest due thereon.                  





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