Taxpayer's intent makes remittance a deposit

Article Abstract:

The Tax Court held in the 'Hays' case that the remittance of a taxpayer to the IRS was a deposit and not a payment of tax because this taxpayer paid the money to avoid future deficiencies and not to settle an existing liability. In accordance with 'Risman' (1993), the court explained that a remittance is not a tax payment until the taxpayer dedicates the funds for the satisfaction of a present liability. The court found that it was not likely that the taxpayer planned the payment for the 1980 tax year only. This taxpayer had not settled his 1979 tax return by the time of the remittance, did not anticipate a substantial tax liability for 1980 and was expecting financial difficulties in the future. The court held that the taxpayer aimed to use the deposit to his 1982 tax liability because his tax returns for 1980 and 1981 did not show any tax liabilities.

Tax assessment, Payment

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Court cannot hear late petition - even if taxpayer lacked notice

Article Abstract:

The Tax Court decided in 'Lewis' to dismiss the taxpayers' suit because it did not have the proper jurisdiction. It found that it lacked jurisdiction due to the fact that the taxpayers submitted their petition 438 days after a notice of deficiency was sent. The taxpayers argued that they were late in filing their petition because they did not receive the actual notice since they divided their time between two states. However, they did not inform the IRS of this change in address and did not monitor their mail at the two addresses while vacant. However, Sec. 6212(b)(1) indicates that notice is sufficient if sent to the last known address of the taxpayers. Therefore, the IRS had made a valid deficiency notice because it sent one to the last known address of the taxpayers.

Tax appeals, Jurisdiction, Notice (Law), United States. Internal Revenue Service

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