- 5 -
balance to the Freijes. The Freijes also made remittances to
respondent of $2,300 on June 10, 1997, and $1,500 on October 6,
1997, that respondent treated as payments of estimated tax for
1997.
The Freijes timely filed a joint Federal income tax return
for the 1997 taxable year (1997 return) reporting a tax due of
$21,510, listing withholding credits of $4,134, and claiming
estimated tax payments of $6,600.3 A payment of $4,000 was sent
with the 1997 return. The $21,510 in tax reported as due on the
1997 return, as well as additions to tax for late payment and
failure to pay estimated tax, plus interest, were assessed on
June 8, 1998. Subsequent remittances of $2,000 each were
credited against the Freijes' 1997 liability on May 3 and June 1,
1998. On or about July 6, 1998, petitioner mailed a check for
$1,776 to respondent.4 This check was erroneously posted to the
3 The figure of $6,600 in claimed estimated tax payments for
1997 apparently reflected the Freijes' understanding that the
three remittances they submitted to respondent during 1997 (i.e.,
$2,800, $2,300, and $1,500, for a total of $6,600) constituted
estimated tax payments for that year. However, as noted,
respondent applied a portion of the initial $2,800 remittance to
the Freijes' 1995 liability and refunded the balance.
Consequently, the total 1997 estimated tax payments recorded in
the Freijes' account when their 1997 return was filed equaled
$3,800 (i.e., the total of the latter two 1997 remittances), not
the $6,600 reported on the 1997 return.
4 If respondent had not applied a portion of the Freijes'
1997 remittance of $2,800 to their 1995 liability, the $1,776
remittance of July 6, 1998, would have resulted in total
remittances for 1997 of $20,510, or $1,000 less than the tax
(continued...)
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