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REFUND DENIED AS UNTIMELY.

MAR. 27, 2003

Olson, Stephen E., et ux. v. U.S.

DATED MAR. 27, 2003
DOCUMENT ATTRIBUTES
  • Case Name
    STEPHEN E. OLSON AND CORENE E. OLSON v. UNITED STATES
  • Court
    United States District Court for the Northern District of Illinois
  • Docket
    No. 02 C 6257
  • Judge
    Conlon, Susan B.
  • Parallel Citation
    91 A.F.T.R.2d (RIA) 2003-2757
    2003-1 U.S. Tax Cas. (CCH) P50,469
    2003 WL 21688739
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2003-15192 (2 original pages)
  • Tax Analysts Electronic Citation
    2003 TNT 123-11

Olson, Stephen E., et ux. v. U.S.

 

JUDGMENT IN A CIVIL CASE

 

 

Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury rendered its verdict.

X Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.

 

[1] IT IS HEREBY ORDERED AND ADJUDGED that judgment is entered for defendant United States and against plaintiffs Stephen and Corene Olson.
Michael W. Dobbins, Clerk of Court

 

 

Christopher Burton, Deputy Clerk

 

Date: March 27, 2003

 

* * * * *

 

 

ORDER

 

 

[2] Stephen and Corene Olson (collectively, "plaintiffs") seek a refund of their 1997 income tax overpayment. The parties filed cross-motions for summary judgment.

[3] The following facts are undisputed. Three remittances were made to the Internal Revenue Service ("IRS") for plaintiffs' tax liability for the 1997 tax year: (i) an employer's withholding of $5,640 from plaintiffs' wages throughout 1996; (ii) plaintiffs' 1996 income tax overpayment, which plaintiffs requested be applied to their 1997 tax liability; and (iii) an estimated income tax payment of $10,000. Plaintiffs' 1997 income tax return was due on April 15, 1998. Although plaintiffs applied for and received a filing extension until August 15, 1998, plaintiffs did not file their 1997 return until August 19, 2001. After plaintiffs filed their return, the IRS mailed plaintiffs a tax statement indicating overpayment and a $20,145.62 refund. The statement noted that the period for claiming a refund may have expired. The IRS subsequently disallowed the refund.

[4] Summary judgment is appropriate when the moving papers and affidavits show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

[5] A claim for refund of a tax overpayment must be filed "within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later. . . ." 26 U.S.C. § 6511(a). The government concedes that plaintiffs' August 19, 2001 return constitutes a claim for refund. Under § 6511(a), plaintiffs' claim is timely.

[6] A timely claim under § 6511(a) is subject to a ceiling imposed by 26 U.S.C. § 6511(b)(2)(A). That provision states that "the amount of the credit or refund shall not exceed the portion of the tax paid within the period immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return." 26 U.S.C. § 6511(b)(2)(A). Because plaintiffs filed the 1997 return on August 19,2001, the relevant period under § 651 (b)(2)(A) extends from August 19, 2001 back to April 19, 1998 (three years plus a four-month extension). According to the government, plaintiffs' three remittances were paid on April 15, 1998, outside that period. Plaintiffs contend their three tax payments were not "taxes paid" under § 6511 until they filed their final return in August 2001. Thus, plaintiffs argue their tax remittances fall within the period that entitles them to a refund.

[7] Tax payments are not considered "tax paid" for purposes of § 6511 at the time a return is filed or assessed. Baral v. United States, 528 U.S. 431 (2000). The time when tax is considered "paid" is governed by 26 U.S.C. § 6513. Id. at 435. Under § 6513, each of plaintiffs' three tax payments was deemed paid on April 15, 1998. Taxes withheld from a taxpayer's wages are deemed paid on April 15th following the close of the taxable year for which taxes were withheld. 26 U.S.C. § 6513(b)(1). Estimated tax payments, including overpayment of a past year's tax credit to the succeeding taxable year, are deemed paid on the last day prescribed for filing the return for the year to which the payment relates, without regard to time extensions. 26 U.S.C. § 6513(b)(2); 26 U.S.C. § 6513(d). For purposes of § 6511(b)(2)(A), plaintiffs' three tax payments were paid on April 15, 1998. These payments fall outside the § 6511(b)(2)(A) period. As a matter of law, plaintiffs' refund is barred under § 6511(b)(2)(A). Accordingly, the government's motion for summary judgment must be granted and plaintiffs' cross-motion must be denied.

DOCUMENT ATTRIBUTES
  • Case Name
    STEPHEN E. OLSON AND CORENE E. OLSON v. UNITED STATES
  • Court
    United States District Court for the Northern District of Illinois
  • Docket
    No. 02 C 6257
  • Judge
    Conlon, Susan B.
  • Parallel Citation
    91 A.F.T.R.2d (RIA) 2003-2757
    2003-1 U.S. Tax Cas. (CCH) P50,469
    2003 WL 21688739
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2003-15192 (2 original pages)
  • Tax Analysts Electronic Citation
    2003 TNT 123-11
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