Michael Zarky - Page 4

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          that the refunded amount was paid “within the period which would            
          be applicable under section 6511(b)(2) * * *, if on the date of             
          the mailing of the notice of deficiency a claim had been filed              
          (whether or not filed) stating the grounds upon which the Tax               
          Court finds that there is an overpayment”.                                  
               For taxable years ended before August 6, 1997, the period of           
          section 6511(b)(2) that was applicable in a case such as this was           
          the 2-year period of section 6511(b)(2)(B).  Commissioner v.                
          Lundy, 516 U.S. 235 (1996); see also Healer v. Commissioner,                
          115 T.C. 316 (2000).  For taxable years ended after August 5,               
          1997, however, the Taxpayer Relief Act of 1997, Pub. L. 105-34,             
          sec. 1282(a) and (b), 111 Stat. 1037, added to section 6512(b)              
          flush language that in certain cases lengthened this 2-year                 
          period.  That language provides that the applicable period under            
          section 6511(a) and (b)(2) is 3 years “In a case described in               
          subparagraph (B) [of section 6512(b)(3)] where the date of the              
          mailing of the notice of deficiency is during the third year                
          after the due date (with extensions) for filing the return of tax           
          and no return was filed before such date”.2  Thus, in a case of a           
          taxpayer such as petitioner who as of the date of the mailing of            
          a notice of deficiency had not filed a Federal income tax return            
          for a taxable year ended after August 5, 1997, but who has                  


               2 We are unaware of any case in which a Court has applied              
          the 3-year rule described in this flush language.                           





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