                  T.C. Memo. 2010-154



                UNITED STATES TAX COURT



            THOMAS D. PORTER, Petitioner v.
     COMMISSIONER OF INTERNAL REVENUE, Respondent



Docket No. 6131-08.               Filed July 20, 2010.



     After P failed to file a timely return for tax
year 2005, R determined a deficiency and additions to
tax under sec. 6651(a)(1) and (2), I.R.C., for failure
to file on time and failure to pay on time,
respectively, and an addition to tax under sec.
6654(a), I.R.C., for failure to pay estimated tax. P
subsequently prepared and filed a joint return for tax
year 2005 showing no deficiency but claiming an
overpayment derived from carryovers of unused
overpayments from prior years and requested a refund.
R conceded the deficiency and additions to tax but
denied the refund claim, arguing that credits for
unused overpayments for prior years were barred by the
statute of limitations.

     Held: P is not entitled in these proceedings to a
refund for tax year 2005 on account of a claimed
overpayment arising from unused overpayments for prior
years because the timeliness of the claims for credit
for the unused overpayments is in dispute.
                                 - 2 -

          Held, further, the Court has no jurisdiction to
     consider the timeliness of the claims for credit for
     unused overpayments for tax years not properly before
     it.



     Gerald L. Brantley and William R. Leighton, for petitioner.

     Jeffrey D. Heiderscheit and T. Richard Sealy III, for

respondent.



              MEMORANDUM FINDINGS OF FACT AND OPINION


     WHERRY, Judge:     This case is before the Court on a petition

for redetermination of an alleged 2005 Federal income tax

deficiency, additions to tax under section 6651(a)(1) for failure

to file on time and section 6651(a)(2) for failure to pay on

time, and an addition to tax under section 6654(a) for failure to

pay estimated tax.1   Respondent has conceded the deficiency and

the additions to tax.    The sole issue for decision is whether

petitioner is entitled to a refund resulting from a claimed

overpayment that arises from unused overpayments from prior

years.   Taking and receiving credit for the claimed overpayments,

according to respondent, is barred by the statute of limitations.




     1
      Unless otherwise indicated, all section references are to
the Internal Revenue Code, as amended and in effect for the
taxable year at issue.
                                - 3 -

                           FINDINGS OF FACT

     Some of the facts have been stipulated and are so found.

The stipulation of facts and the attached exhibits are

incorporated herein by this reference.    Petitioner resided in

Texas at the time he filed the petition.

     Petitioner, who received an M.B.A. in finance from the

University of North Dakota in 1975, is self-employed as an

investment adviser and specializes in selling mortgage-backed

securities.   Petitioner holds licenses to sell insurance,

commodities, futures, and securities.    He provides his investment

services through firms that are members of the National Futures

Association, the futures industry’s regulatory authority.

     Petitioner is married, and his wife is employed and has

income tax withheld from her income.    Petitioner and his wife

make estimated tax payments toward their tax liabilities.

     Petitioner has exhibited a pattern, going back to at least

2000, of late filing of income tax returns that is, in part, a

result of financial transactions which tend to cause carryovers

to subsequent tax years.    Petitioner did not timely file his

individual income tax returns for tax years 2002, 2003, 2004, and

2005, even after taking into consideration the extensions of time

to file to October 15 of the following year which were granted as

to each of the four returns.
                               - 4 -

     Though he received an extension of time until October 15,

2006, to file his 2005 return, petitioner failed to make such a

filing for over a year after that date.   On April 24, 2007,

respondent mailed to petitioner a notice of an absence of any

record of petitioner’s 2005 return having been received.    On

September 3, 2007, respondent filed a substitute for return for

petitioner’s 2005 tax year.   Finally, on December 14, 2007,

respondent issued petitioner a statutory notice of deficiency

determining an alleged income tax deficiency for tax year 2005 of

$223,688 and the following additions to tax: $50,123.93 under

section 6651(a)(1) for failure to file on time; $21,163.44 under

section 6651(a)(2) for failure to pay on time; and $8,931.72

under section 6654(a) for failure to pay estimated tax.

     Petitioner timely filed a petition with this Court on

March 12, 2008, requesting a trial in San Antonio, Texas.    In the

petition, petitioner disputed the asserted deficiency and argued

that respondent had “failed to include a pre-payment credit in

the amount of $172,083.07, and deductions, expenses, credits and

other tax benefits that Petitioner is entitled to”.   The petition

further stated that a “joint return is being prepared” and

promised that when such return is filed, “it will show an

overpayment of income tax, not a deficiency”.

     Petitioner eventually submitted a joint income tax return

for tax year 2005, bearing a signature date of April 8, 2008, to
                               - 5 -

respondent’s counsel sometime after April 7, 2008.   The return

showed a total Federal income and self-employment tax liability

for 2005 of $177,864.44 and an overpayment of $171,081.59, all of

which petitioner requested be refunded to him.   This overpayment

arises, in part, because of a claimed payment of $281,083.07,

consisting of “2005 estimated tax payments and an amount applied

from 2004 return”.   Respondent has accepted this return as filed,

“aside from payment credits carried forward from prior years”,

and conceded “that Petitioner has no tax deficiency for tax year

2005.   Accordingly, Petitioner is not liable for additions to tax

for tax year 2005 under I. R. C. §§ 6651 or 6654.”   A trial was

held in San Antonio, Texas, on February 25, 2009, to determine

whether petitioner is entitled to a refund of the alleged

overpayment of $171,081.59 as shown on his delinquent 2005 tax

return.

                              OPINION

     At the trial and in his posttrial briefs and other filings

petitioner traces the claimed payment of $281,083.07 to unused

credits from tax years 2002, 2003 and 2004.   Respondent

acknowledges that “Petitioner’s tax payments made toward his 2004

tax year * * * may be claimed” but argues that credit for

overpayments relating to tax years 2002 and 2003 is now barred by

the period of limitations prescribed in section 6511(b), the so-

called lookback rule.   Respondent claims that “Petitioner filed a
                               - 6 -

joint return for 2002 on April 7, 2008” and for 2003 on February

15, 2008.   If the 2002 and 2003 tax returns were in fact filed on

these dates, section 6511(b)(2)(A) will apply.     That section

limits the “amount of the credit” to an amount not to “exceed the

portion of the tax paid within * * * 3 years plus the period of

any extension of time for filing the return.”     That limitation

would deny petitioner any credit for payments made towards, and

in excess of, his 2002 and 2003 tax liability.2

     Petitioner disagrees with respondent on when he filed his

2002 and 2003 returns.   Petitioner claims he “filed his 2002 Form

1040 on February 10, 2006, a date within three years of the due

date” and “his 2003 Form 1040 on September 10, 2007, a date

within three years of the due date”.   If petitioner is correct

about the dates when these two returns were filed, then the

entire amount of overpayment in each of the tax years 2002 and

2003 would be available as a credit in tax year 2005, since both

the 2002 and 2003 returns requested the respective overpayment to

be carried forward to the succeeding year.

     The disagreement between respondent and petitioner on the

filing dates for petitioner’s 2002 and 2003 returns results from

their dispute over what constituted the filing of those returns.


     2
      Because petitioner does not claim to have made any payments
with respect to his tax years 2002 and 2003 after the respective
dates on which the returns for those years were originally due,
the 2-year lookback period of sec. 6511(b)(2)(B) would also not
help him.
                                 - 7 -

Petitioner admits that he “did not mail his 2002 Form 1040 to the

IRS”.    Instead, petitioner states that he “delivered his 2002

Form 1040 to IRS Agent Gutierrez on September 16, 2005”.

Similarly, “Petitioner did not mail his 2003 Form 1040 to the

IRS”.    Rather, “he delivered it to the office of IRS Agent

Gutierrez.”    Respondent contends that “even if Petitioner had

hand-delivered his returns as he alleges, that hand-delivery

would not have constituted filing within the meaning of the

Internal Revenue Code”.

     Petitioner urges us to find that his 2002 and 2003 returns

“were filed when he hand-carried them to agents of the IRS as

instructed.    Moreover, he delivered each return within three

years of the due date (including extensions).    Hence, Petitioner

is entitled to refund of the overpayment claimed on his 2005 Form

1040.”    Respondent, on the other hand, points out that “The

claimed overpayment in question is in fact derived from

carryovers of overpayments from prior tax years.    Without

overpayments in those prior, non-petitioned tax years, there can

be no carryover to the petitioned year.”    Respondent asserts that

we have “no jurisdiction to determine the existence of or

refundability of any overpayments due to Petitioner for any year

other than 2005”.

     We agree with respondent.    We are a court of limited

jurisdiction and may exercise our jurisdiction only to the extent
                               - 8 -

provided by Congress.   See sec. 7442; see also GAF Corp. & Subs.

v. Commissioner, 114 T.C. 519, 521 (2000).   Our jurisdiction to

redetermine a deficiency is premised on the issuance of a valid

notice of deficiency followed by a timely filing of a petition.

See GAF Corp. & Subs. v. Commissioner, supra at 521.   Once

validly exercised, our “jurisdiction extends to the entire

subject matter of the correct tax for the taxable year”, Naftel

v. Commissioner, 85 T.C. 527, 533 (1985), including the

taxpayer’s claim of an overpayment of tax, see sec. 6512(b)(1).

However, section 6512(b)(3) circumscribes the grant of our refund

jurisdiction under section 6512(b)(1) by the lookback rule of

section 6511(b).   Allen v. Commissioner, 99 T.C. 475, 476-477

(1992), affd. without published opinion 23 F.3d 406 (6th Cir.

1994).

     In determining the correct tax for the taxable year, section

6214(b) allows us to “consider such facts with relation to the

taxes for other years * * * as may be necessary”, but explicitly

deprives us of “jurisdiction to determine whether or not the tax

for any other year * * * has been overpaid or underpaid.”

     We have previously construed section 6214(b) as granting us

the authority for “computing, as distinguished from

‘determining,’ the correct tax liability for a year not in issue

when such a computation is necessary to a determination of the

correct tax liability for a year that has been placed in issue.”
                               - 9 -

Lone Manor Farms, Inc. v. Commissioner, 61 T.C. 436, 440 (1974),

affd. without published opinion 510 F.2d 970 (3d Cir. 1975).

Thus, we have exercised this grant of authority in considering

adjustments such as net operating losses relating to

nondeficiency years.   See Hill v. Commissioner, 95 T.C. 437

(1990); Calumet Indus., Inc. v. Commissioner, 95 T.C. 257, 275

(1990); State Farming Co. v. Commissioner, 40 T.C. 774, 783

(1963).

     However, petitioner asks us to do much more than merely

compute the correct tax liability for a nondeficiency year.    He

exhorts us to order a refund for the deficiency year based on a

finding of an overpayment that, in turn, results from crediting

overpayments from nondeficiency years that according to

petitioner remained unused and for which he timely claimed

credit.   We read section 6214(b) as preventing us from doing so.

See Commissioner v. Gooch Milling & Elevator Co., 320 U.S. 418,

420-421 (1943) (decided under the predecessor of present section

6214(b)).

     Petitioner has not been issued a notice of deficiency

for tax year 2002, 2003, or 2004.   The only tax year before us is

2005.   Deciding whether petitioner may carry forward unused

overpayments from his tax years 2002 and 2003 to his tax year

2005 would require us to make the following determinations:    That

such overpayments were in fact made and remained unused; that
                              - 10 -

petitioner’s hand delivery of his 2002 and 2003 tax returns

constituted the filing of such returns; and that such filings

were timely under the lookback rule of section 6511(b).   However,

     the jurisdiction of this Court under section 6512(b)(1)
     with respect to determining an overpayment is limited
     to the taxable year before the Court. Because
     the * * * [years 2002 and 2003 are] not before the
     Court, we have no jurisdiction to determine whether
     petitioner * * * in fact overpaid * * * [his 2002 and
     2003] taxes, and, if so, whether such overpayment may
     be credited, refunded, or applied to the * * * [2005]
     tax year, which is before the Court in this proceeding.

Patronik-Holder v. Commissioner, 100 T.C. 374, 377 (1993).     We

lack jurisdiction to make the determinations that are a

prerequisite for ruling favorably on petitioner’s claim for

refund for tax year 2005.   Therefore, we hold that petitioner is

not entitled to any refund for tax year 2005 in these

proceedings.

     The Court has considered all of petitioner’s contentions,

arguments, requests, and statements.   To the extent not discussed

herein, we conclude that they are meritless, moot, or irrelevant.

     To reflect the foregoing,


                                         An appropriate decision

                                    will be entered.
