                        T.C. Memo. 1997-564



                      UNITED STATES TAX COURT



                  ARTHUR TURCO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent

                   ELLEN TURCO, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket Nos. 575-96, 576-96.      Filed December 23, 1997.



     John R. McCabe, for petitioners.

     Thomas A. Dombrowski, for respondent.



             MEMORANDUM FINDINGS OF FACT AND OPINION


     FOLEY, Judge:   Respondent issued separate notices of

deficiency to Arthur and Ellen Turco for 1989, 1990, and 1991.

Mr. and Mrs. Turco filed separate petitions, and their cases have

been consolidated.   Unless otherwise indicated, all section
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references are to the Internal Revenue Code in effect for the

years in issue, and all Rule references are to the Tax Court

Rules of Practice and Procedure.

     After concessions, the parties agree that petitioners

overpaid their taxes for 1989, 1990, and 1991.      Accordingly, the

issues for decision are as follows:

     1.    Whether petitioners are entitled to refunds of their

1989, 1990, and 1991 overpayments.       We hold that petitioners are

entitled to refunds only of their 1990 and 1991 overpayments.

     2.    Whether petitioners, pursuant to section 6654, are

liable for additions to tax for underpayment of estimated taxes

for 1990 and 1991.     We hold that they are liable.

                           FINDINGS OF FACT

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

the time Mr. and Mrs. Turco filed their petitions, they resided

in Villa Park, California.

     Petitioners filed Forms 4868 (Application for Automatic

Extension of Time to File U.S. Individual Income Tax Return) for

1989, 1990, and 1991 in April of 1990, 1991, and 1992,

respectively.    On these forms, petitioners estimated their tax

liability and paid the following amounts with each extension

request:

     Date of Request          Tax Year          Amount of Payment

     April 16, 1990             1989                $6,294.85
     April 7, 1991              1990                10,000.00
     April 7, 1992              1991                30,000.00
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Petitioners intentionally overpaid their taxes to avoid interest

charges and penalties.

     In January of 1993, petitioners were contacted by Internal

Revenue Service (IRS) Agent Chin McClaughlin.    Agent McClaughlin

informed petitioners that the IRS had no record of receiving

their Federal income tax returns for 1989, 1990, and 1991.     Mr.

Turco informed Agent McClaughlin that petitioners mailed their

returns prior to the respective deadlines.

     Between March and June of 1993, Agent McClaughlin and Mr.

Turco met four times.    At their first meeting, Mr. Turco, in

response to Agent McClaughlin's request, hand-delivered

photocopies of petitioners' purported 1989, 1990, and 1991 joint

returns to Agent McClaughlin.    On each return, petitioners

reported an overpayment and requested that each overpayment be

applied to the following year's tax liability.    Agent McClaughlin

used the photocopied returns as the basis for his audit of

petitioners.

     In June of 1994, the IRS informed the Turcos that they owed

taxes relating to 1992.   Mr. Turco spoke with Problems Resolution

Officer Jackie North and requested that overpayments, from years

prior to 1992, be applied to satisfy the alleged 1992 tax

deficiency.    Ms. North informed petitioners that she would try to

accommodate the request if petitioners provided returns with

original signatures.    Petitioners did not comply because they

believed that the IRS was attempting to trick them into tacitly
                                   4

admitting that they never filed.       Mr. Turco informed Ms. North

that he and his wife had filed their 1989, 1990, and 1991 tax

returns twice (i.e., once when they were due and again when they

delivered the returns to Agent McClaughlin).

      On October 13, 1995, each petitioner received a separate

statutory notice of deficiency relating to 1989, 1990, and 1991.

On January 11, 1996, petitioners each filed a Tax Court petition,

requesting refunds of their 1989, 1990, and 1991 overpayments.

On May 9, 1997, petitioners filed properly executed Forms 1040,

U.S. Individual Income Tax Return, for 1989, 1990, and 1991.

                              OPINION

I.   Whether Petitioners May Recover Their Overpayments

      The parties agree that petitioners remitted more money than

they owed for 1989, 1990, and 1991.       Petitioners concede that all

of the remitted funds were payments, rather than deposits.        The

issue, therefore, is whether petitioners may obtain a refund of

their overpayments.

      To obtain a refund of an overpayment, a taxpayer must file a

refund claim within the later of 3 years from the date the return

was filed or 2 years from the date the tax was paid.       Sec.

6511(a).   If the 3-year period applies, the refund is limited to

the tax paid during the 3 years (plus any extension of time for

filing the return) immediately preceding the filing of the refund

claim (3-year look-back period).       Secs. 6512(b), 6511(b)(2)(A).

If the 2-year period applies, the refund is limited to the tax
                                  5

paid during the 2 years immediately preceding the filing of the

refund claim (2-year look-back period).    Secs. 6512(b) and

6511(b)(2)(B).   Before we can determine whether petitioners are

entitled to refunds of their 1989, 1990, and 1991 overpayments,

we must determine whether and when petitioners filed Federal

income tax returns and/or refund claims.

     A.   Whether Petitioners Filed Tax Returns

     Respondent determined that petitioners did not file Federal

income tax returns for 1989, 1990, and 1991.    Petitioners, who

bear the burden of proof, contend that they filed the appropriate

tax returns twice.   Rule 142(a); Welch v. Helvering, 290 U.S.

111, 115 (1933).   They assert that Mr. Turco mailed timely

returns for each year in question. The IRS, however, has no

record that it received returns from petitioners for these years.

Moreover, petitioners have not established that they mailed the

returns in question.

     Petitioners further contend that they filed, for a second

time, when Mr. Turco delivered photocopies of their returns to

Agent McClaughlin.   A return is valid only if it is verified

under penalty of perjury by an original signature and filed in

the appropriate office.   Sec. 6061; Beard v. Commissioner, 82

T.C. 766 (1984), affd. 793 F.2d 139 (6th Cir. 1986); sec. 1.6061-

1(a), Income Tax Regs.    Petitioners urge the Court to ignore the

signature and place of filing requirements.    We decline to do so
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and, accordingly, conclude that petitioners did not file Federal

income tax returns for 1989, 1990, and 1991.

     B.   Whether Petitioners Filed Refund Claims

     Generally, a refund claim must be verified under penalty of

perjury in order to be valid.    Secs. 6061, 6065; sec. 301.6402-

2(b), Proc. & Admin. Regs.   It is well established, however, that

an informal claim (i.e., one that contains formal defects) will

suffice as long as it requests a refund and fairly advises

respondent of the nature of the taxpayer's claim.     United States

v. Kales, 314 U.S. 186 (1941); see Lundy v. Commissioner, 516

U.S. 235 (1996).   There are no bright line rules as to what

constitutes an informal claim.    New England Elec. Sys. v. United

States, 32 Fed. Cl. 36 (1995).   Rather, each case must be decided

on its own particular set of facts.    Id.   The relevant question

is whether respondent knew or should have known that a refund

claim was being made.   Id.; see Angelus Milling Co. v. United

States, 325 U.S. 293, 297 (1945) (stating that the issue is

whether respondent had notice, sufficient to focus attention on

the merits of petitioner's claim).

     Over a 3-month period, Agent McClaughlin reviewed the

photocopied returns, along with additional information that

petitioners provided pursuant Agent McClaughlin's requests.    The

photocopied returns contained requests for respondent to credit

petitioners' overpayments to subsequent years (i.e., requests for

refunds) and   adequately apprised respondent that petitioners
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were making refund claims.    Thus, we conclude that petitioners'

photocopied returns were informal refund claims.        Cf. United

States v. Kales, supra (finding that letters to the IRS are

informal claims).

      C.   Application of the Limitation Periods

      Because petitioners did not file returns, they are only

entitled to refunds of overpayments made within 2 years of the

filing of their informal claims.       Sec. 6511(a).   Petitioners'

1991 and 1992 payments, but not their 1990 payments, are within

the 2-year period.    See sec. 6511(b).     Therefore, petitioners are

entitled to a refund of their 1990 and 1991 overpayments.

II.   Underpayment of Estimated Tax

      Respondent determined that petitioners are liable for

additions to tax for underpayment of their estimated taxes for

1990 and 1991.    Petitioners contend that they filed timely 1989

and 1990 returns which directed the IRS to apply their

overpayments to their 1990 and 1991 estimated taxes.        We have

concluded, however, that petitioners did not file their returns.

Accordingly, we sustain respondent's determination.

      To reflect the foregoing,


                                             Decisions will be entered

                                        pursuant to Rule 155.
