- 15 -
“may be assessed by the Secretary in the same manner as in the
case of a mathematical or clerical error appearing upon the
return”. Sec. 6201(a)(3); see Schlosser v. Commissioner, 94
T.C. at 824-825. Consequently, respondent was not required to
issue a notice of deficiency for the underpayment of tax
attributable to any overstatement of petitioner’s estimated tax
payments.
3. The Right of Setoff Under Section 6402(a)
When a taxpayer makes voluntary payments to the IRS, he/she
has a right to direct the application of those payments to
whatever liability he chooses. Wood v. United States, 808 F.2d
411, 416 (5th Cir. 1987); Muntwyler v. United States, 703 F.2d
1030, 1032 (7th Cir. 1983); O’Dell v. United States, 326 F.2d
451, 456 (10th Cir. 1964). Under the voluntary payment rule,
when a taxpayer who has outstanding tax liabilities voluntarily
makes a payment, the IRS usually will honor a taxpayer’s request
as to how to apply that payment. United States v. Ryan, 64 F.3d
1516, 1522 (11th Cir. 1995). However, section 6402(a) and the
regulations promulgated thereunder demonstrate that a taxpayer’s
right to designate his/her voluntary payments does not extend to
an overpayment reported on a return.
Section 6402(a) allows the IRS to credit an “overpayment,
including any interest allowed thereon, against any liability in
respect of an internal revenue tax on the part of the person who
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011