- 18 -
liability merely preserved their character as overpayments. See
sec. 6401(a); Ill. Masonic Home v. Commissioner, 93 T.C. 145, 150
(1989); Diamond Gardner Corp. v. Commissioner, supra at 881 ("any
payment by a taxpayer of a [time-]barred tax liability, whether
voluntary or involuntary, automatically becomes an
'overpayment'").
Finally, petitioners contend, and the 1991 Form 4340
confirms, that respondent made levies of $387.49 and $120.43
against petitioners in 1996 and 1997 that were applied against
the 1991 quick assessment liability after its April 15, 1995,
extinguishment. As a consequence, the payments made pursuant to
these levies became overpayments. See sec. 6401(a); Diamond
Gardner Corp. v. Commissioner, supra.
Petitioners made payments of $2,617 under the 1993
installment agreement that respondent should have applied to
their 1993 liability.14 Petitioners' overpayments of $1,849 and
$1,829.58 for 1995 and 1996, respectively, are also available to
offset, as of April 15, 1996, and April 15, 1997, respectively,
all or a portion of the 1993 and 1997 liabilities that respondent
has sought to collect. The levies of $387.49 and $120.43 in 1996
14 Alternatively, even if respondent were permitted to apply
petitioners' payments under the 1993 installment agreement to
liabilities arising in other years, respondent's application of
the 1993 installment agreement payments to the extinguished 1991
liability would have converted those payments to overpayments,
pursuant to sec. 6401(a), making them available to satisfy the
1993 and 1997 liabilities sought to be collected herein.
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