Cite as: 536 U. S. 238 (2002)
Souter, J., dissenting
Indeed, even if the employer, seeing a disparity, paid extra FICA taxes on the assumption that the employees had underreported tips, the extra payment would be treated as an overpayment. See Tr. of Oral Arg. 8; Jones v. Liberty Glass Co., 332 U. S. 524, 531 (1947) (overpayment is "any payment in excess of that which is properly due"). The overall implication is that employers are meant to pay taxes based on specific information provided by others. As a practical matter, the tips themselves are not the true basis for liability; instead, it is an employee report that creates the obligation.
Some event must therefore trigger liability for taxes on unreported tips before the IRS can make the assessment, and this event turns out to be the notice and demand for which § 3121(q) makes special provision in such a case.7 Only after notice and demand can the Government proceed to assessment under § 6201. Whereas the usual sequence is assessment, then notice and demand, see § 6303, here it is notice and demand, then assessment.
The IRS does not dispute this. It concedes that it does not rely upon § 6201 before issuing the notice, see Reply Brief for United States 15-16, but instead performs a "pre-assessment" estimate (for which, incidentally, no statutory authorization exists). Then it issues notice and (liability having now attached) uses the same estimate for the official assessment under § 6201.
Again, at first blush, it is tempting to say that the sequence of events may be unusual, but under the aggregate assessment practice the employer-taxpayer ends up in the same position he would have been in if he failed to pay FICA taxes on reported tips. But there are two very significant
7 The majority takes note of this unusual scheme, but finds significance only in the fact that until notice issues (and liability arises), interest does not run. Ante, at 249. But to interpret the statute as nothing more than a method of preventing the running of interest avoids the significance of § 3121(q), because there is already a statute that prevents interest running on unpaid FICA taxes. § 6205(a)(1).
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