- 28 -
remittances from other years to the taxpayer's account for the
year of the refund, without having made another assessment. The
Court of Appeals concluded that, since the assessment had been
extinguished by the taxpayer's payment, the Commissioner could
not employ his summary collection powers in the absence of an
assessment, but instead had to recover the erroneous refund
through an erroneous refund action under section 7405.18
Respondent has applied $6,500 in 1999 remittances to the
Freijes' 1997 account in an effort to recover the erroneously
refunded $5,513 (plus interest, presumably). Under O'Bryant, he
may not do so. Instead, these 1999 undesignated remittances,
under respondent's then-applicable procedures, see Rev. Rul. 73-
305, supra, should have been applied to satisfy outstanding
assessments for 1998. Had the 1998 assessments been thereby
satisfied, presumably some portion of these 1999 remittances
would have been available for application to the Freijes' 1999
account. Consequently, we conclude that the levies for 1998 and
1999 should not be sustained in their present form, as the unpaid
tax for each year may be affected by the proper application of
the $6,500 in 1999 remittances by the Freijes.
18 The Court of Appeals declined to decide whether, as the
Commissioner contended, he had a further option of recovering the
refund through a suit begun within the limitations period of sec.
6501, without regard to sec. 7405.
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