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underpayment interest owed by a taxpayer at the time of the
overpayment calculation. Stated differently, can there be an
“overpayment” in an amount that has not been reduced by unpaid
underpayment interest?
1. What Constitutes an Overpayment?
The Code does not have an all-inclusive definition of an
“overpayment”. Section 6401 provides examples of certain types
of overpayments. For instance, the term “overpayment” includes
“that part of the amount of the payment of any * * * tax which is
assessed or collected after the expiration of the period of
limitation properly applicable thereto.” Sec. 6401(a). On the
other hand, section 6401(c) provides that an “amount paid as tax
shall not be considered not to constitute an overpayment solely
by reason of the fact that there was no tax liability in respect
of which such amount was paid.” However, these specific
provisions do not provide a general definition of the term. The
Supreme Court in Jones v. Liberty Glass Co., 332 U.S. 524, 531
(1947), has defined an overpayment as follows:
we read the word “overpayment” in its usual sense, as
meaning any payment in excess of that which is properly
due. Such an excess payment may be traced to an error
in mathematics or in judgment or in interpretation of
facts or law. And the error may be committed by the
taxpayer or by the revenue agents. Whatever the
reason, the payment of more than is rightfully due is
what characterizes an overpayment.
See also United States v. Dalm, 494 U.S. 596, 609 n.6 (1990)
(“The commonsense interpretation is that a tax is overpaid when a
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