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A taxpayer may make a cash deposit with the Secretary
which may be used by the Secretary to pay any tax * * *
which has not been assessed at the time of the deposit.
Such a deposit shall be made in such manner as the Secretary
shall prescribe.
Rev. Proc. 2005-18, 2005-1 C.B. 798, gives guidance in
determining whether a remittance is considered payment.
According to the Rev. Proc. 2005-18, sec. 4.01(1), 2005-1 C.B. at
799, the taxpayer may make a deposit by remitting to the IRS a
check or money order, accompanied by a written statement
designating the remittance as a deposit. The written statement
accompanying the check remitted by petitioners states that the
check is for an “advance payment”, not a deposit. Petitioners
argue that they made an undesignated remittance while they were
under examination, but before a liability was proposed in
writing, and therefore the remittance was a deposit. Rev. Proc.
2005-18, sec. 4.04, 2005-1 C.B. at 800, applies to an
undesignated remittance; i.e., a remittance that is not
designated as a deposit. Petitioners’ remittance came after they
had been issued a statutory notice of deficiency; therefore Rev.
Proc. 2005-18, sec. 4.04, does not apply. Accordingly,
petitioners’ remittance on August 30, 2005, is a payment of
income tax and interest, as set forth in their written statement.
We lack jurisdiction to consider deficiencies that have been
paid before the issuance of a statutory notice of deficiency.
Hillenbrand v. Commissioner, T.C. Memo. 2002-303. The written
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Last modified: March 27, 2008