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made the overpayment” and, subject to certain limitations, refund
any balance to the person. In lieu of a refund, a taxpayer can
instruct the IRS to credit his overpayment against the estimated
tax for the taxable year immediately succeeding the year of the
overpayment. Sec. 301.6402-3(a)(5), Proced. & Admin. Regs. It
is well settled that the IRS need only refund, or apply to the
taxpayer’s estimated tax, that portion of the overpayment that
exceeds the taxpayer’s “outstanding liability for any tax”. Sec.
301.6402-3(a)(6)(i), Proced. & Admin. Regs.; see N. States Power
Co. v. United States, 73 F.3d 764, 767 (8th Cir. 1996) (quoting
United States v. Ryan, supra at 1523 (“[Section 6402], ‘plainly
gives the IRS the discretion to apply overpayments to any tax
liability’”)); Pettibone Corp. v. United States, 34 F.3d 536, 538
(7th Cir. 1994) (section 6402(a) “leaves to the Commissioner’s
discretion whether to apply overpayments to delinquencies or to
refund them to the taxpayer”); Kalb v. United States, 505 F.2d
506, 509 (2d Cir. 1974) (rejecting the argument that because the
tax overpayment was voluntary, the IRS was bound to comply with
the taxpayer’s direction about how to apply that payment; section
6402(a) “clearly gives the IRS discretion to apply a refund to
‘any liability’ of the taxpayer”).
Respondent’s application of petitioner’s 2000 overpayment to
petitioner’s 1994 tax liability falls within respondent’s
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