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entered by the Tax Court on August 26, 1992. The total
assessments for 1980 and 1981 amounted to $57,506.04 (tax and
interest for 1980 of $15,000 and $15,370.73, respectively, plus
tax and interest for 1981 of $15,000 and $12,135.31,
respectively). Respondent applied the $59,545 credit balance
resulting from the Thompsons’ payments of $59,545 in interest to
satisfy their $57,506.04 liability for 1980 and 1981, leaving a
small credit balance.
The Thompsons’ having remitted $63,000 in June 1987, in
respect of their previously settled deficiencies, respondent
credited $62,225 of that amount to their 1979 account as an
advance payment of tax. Because the Thompsons had no deficiency
for 1979 under both the earlier settlements and the Tax Court’s
decision giving effect to the new settlement, the $30,000 refund
issued in July 1989 left a credit balance of $32,225.
Accordingly, in February 1993, respondent issued a refund check
for $32,225 to the Thompsons. As they had done with their
earlier refund, the Thompsons endorsed this refund check to
DeCastro, as payment of additional legal fees, without depositing
the check in their own checking account.
DeCastro thereafter complained to Dombrowski that the
Thompsons were entitled to receive even more from respondent.
DeCastro argued that the Thompsons were entitled to receive
interest on the $63,000 advance payment (albeit as successively
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