                        T.C. Memo. 2009-105



                      UNITED STATES TAX COURT



         RICHARD D. GREEN AND HAE K. HAN, Petitioners v.
           COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 12955-07L.            Filed May 19, 2009.



     Richard D. Green and Hae K. Han, pro sese.

     Andrew M. Stroot, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     FOLEY, Judge:   The issue for decision is whether to sustain

the decision by respondent to proceed with collection relating to

petitioners’ 1999, 2000, and 2001 tax liabilities.
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                           FINDINGS OF FACT

     In December 2003, petitioners untimely filed their 1998,

1999, 2000, and 2001 joint Federal income tax returns and

reported, among other items, the following information:

                Estimated                       Overpayment/
     Year      Tax Payments     Tax Withheld    (Balance Due)1
                2
     1998        $46,643           $34,000        $67,073
     1999         67,073            33,979          8,742
     2000          8,742            40,495        (55,881)
     2001           –-              62,118        (12,265)
     1 Checks in the amounts of the balances due accompanied the
2000 and 2001 returns.
     2
       This amount includes a $25,000 tax payment petitioners
made by check on Oct. 19, 1999.

Petitioners’ 1998 return, for which petitioners received a 6-

month extension, was filed December 15, 2003.     Respondent treated

petitioners’ reporting of the $67,073 overpayment (1998

overpayment) as a refund claim (1998 refund claim), and on April

20, 2004, respondent’s Philadelphia Service Center issued Letter

105C, Claim Disallowance Letter.    In the letter, respondent

denied the refund claim because the 1998 return was not filed

within 3 years of the return’s due date.

     On February 24, 2006, respondent’s Wheaton, Maryland, office

issued Letter 1058A, Final Notice of Intent to Levy and Notice of

Your Right to a Hearing, relating to petitioners’ 1999, 2000, and

2001 unpaid tax liabilities.    Petitioners sent a letter dated
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February 25, 2006, to respondent’s Philadelphia Service Center

requesting reconsideration of their 1998 refund claim.

     In a letter dated March 8, 2006, to respondent’s Wheaton,

Maryland, office, petitioners requested “abatement of penalties”

relating to 1999 through 2001.    On March 14, 2006, petitioners

sent respondent’s Wheaton, Maryland, office an addendum to

petitioners’ February 25 letter.    In the addendum, Ms. Han stated

that from 2000 to 2002 she was, pursuant to section 6511(h),1

financially disabled and involved in a discrimination and

wrongful termination lawsuit.    She also stated that she had not

authorized anyone to conduct her financial affairs.

     On March 15, 2006, respondent received petitioners’ Form

12153, Request for a Collection Due Process Hearing, in which

petitioners disputed the proposed levy and requested a hearing

relating to 1998, 1999, 2000, and 2001.    Petitioners, on April 5,

2006, faxed respondent a letter dated March 23, 2006, from

Lawrence J. Carroll, a clinical psychologist.    In the letter, Mr.

Carroll stated that from 2000 to 2002 “Ms. Han suffered an

episode of Major Depressive Disorder” that “prevented Ms. Han

from managing her financial affairs.”




     1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code of 1986, as amended.
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     On August 2, 2006, Settlement Officer William DeBeau held a

face-to-face hearing with petitioners during which petitioners

disputed the disallowance of the 1998 refund claim.   Petitioners

stated that they intended to apply the $25,000 tax payment (i.e.,

which was reported on petitioners’ 1998 return as part of the

1998 estimated tax payments) to their 1999 tax liability.

Petitioners also renewed their assertion of Ms. Han’s financial

disability and request for reconsideration of the 1998 refund

claim.

     Respondent, on December 14, 2006, applied the $25,000 tax

payment to petitioners’ 1999 tax liability and, on January 12,

2007, issued a Notice of Determination Concerning Collection

Action(s) Under Section 6320 and/or 6330 (initial determination),

sustaining the collection activity relating to 1999, 2000, and

2001.    The initial determination stated that the 1998 overpayment

had been forfeited because petitioners “did not claim the refund

within the three year time frame to do so.”

     In a letter dated January 17, 2007, petitioners requested a

new notice of determination because the initial determination did

not address the financial disability claim.    Pursuant to

petitioners’ request, respondent, on January 30, 2007, held

another face-to-face hearing solely to discuss the financial

disability issue.   At the hearing, respondent gave petitioners a
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letter rescinding the initial determination and granting

petitioners’ request for a new determination.

     On May 9, 2007, respondent issued a second notice of

determination (final determination) denying petitioners’ appeal

relating to the proposed levy and rejecting Ms. Han’s claim of

financial disability.   Respondent cited Ms. Han’s active

participation in her lawsuit as evidence of her ability to handle

her financial affairs and stated that Richard D. Green, her

husband, could have prevented loss of the 1998 overpayment by

timely filing their return.   On June 7, 2007, petitioners, while

residing in Maryland, filed a petition with this Court seeking

review of the final determination.

                              OPINION

     Petitioners contend that, in determining whether to sustain

the levy notice, respondent erred in refusing to accept the 1998

overpayment as a collection alternative.    Respondent contends

that this Court does not have jurisdiction to review respondent’s

denial of petitioners’ 1998 refund claim.

     Pursuant to section 6330(d)(1), our jurisdiction is defined

by the scope of respondent’s determination.    See Freije v.

Commissioner, 125 T.C. 14, 25 (2005).   Respondent rescinded the

initial determination because of its failure to address the

refund claim, the January 30 hearing was scheduled to discuss
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that claim, and petitioners’ request for a new determination was

granted to allow respondent to address the claim.    In short, the

1998 refund claim is an integral part of the final determination

and thus the proper, and a permissible, subject of our review.2

     We further conclude that petitioners are not entitled to a

refund of the 1998 overpayment as a collection alternative.    A

claim for refund of an overpayment is required to be filed within

3 years of the time the relevant return was filed.   Sec. 6511(a).

Petitioners filed their 1998 return and refund claim

simultaneously.   Thus, petitioners’ 1998 refund claim was timely.

If a refund claim is filed within the 3-year period, the refund

is limited to the amount of tax paid within the 3-year period,

plus the period of any extension of time for filing the return,

immediately preceding the claim.   Sec. 6511(b)(2)(A).   Because

petitioners’ 1998 return was filed December 15, 2003, and

petitioners received a 6-month extension of time to file,

petitioners are entitled to a maximum refund of the amount of tax

paid between June 15, 2000, and December 15, 2003.   During this


     2
       If the underlying tax liability is at issue, we review the
Commissioner’s administrative determination de novo. Goza v.
Commissioner, 114 T.C. 176, 181-182 (2000). If, however, the
underlying tax liability is not at issue, we review the
Commissioner’s administrative determination for an abuse of
discretion. Sego v. Commissioner, 114 T.C. 604, 610 (2000). We
need not decide which standard of review is applicable because
respondent prevails under either standard.
                                - 7 -

period, petitioners did not make any tax payments relating to

1998.    Thus, petitioners are not entitled to a refund.

     Petitioners contend that, pursuant to the financial

disability exception of section 6511(h), the period of limitation

was suspended from 2000 through 2002.    The running of the period

of limitation may, indeed, be suspended while the taxpayer is

financially disabled.    Sec. 6511(h)(1).   An individual will not,

however, be considered financially disabled unless proof of a

medically determinable physical or mental impairment is provided

in such form and manner as the Commissioner may require.    Sec.

6511(h)(2)(A).    More specifically, the Commissioner requires a

written statement from a physician.3    Rev. Proc. 99-21, sec. 4,

1999-1 C.B. 960.    Ms. Han, however, did not establish that she

was financially disabled.    In addition, she was treated by a

clinical psychologist, not a physician, and thus could not and

did not provide the requisite documentation.    Accordingly,

respondent may proceed with the proposed collection action.

     Contentions we have not addressed are irrelevant, moot, or

meritless.




     3
       For purposes of the financial disability exception of sec.
6511(h), only chiropractors and doctors of medicine, osteopathy,
dental medicine, podiatric medicine, and optometry are considered
physicians. See 42 U.S.C. sec. 1395x(r) (1998).
                            - 8 -

To reflect the foregoing,


                                     Decision will be entered

                                for respondent.
