                                           RESEARCH CORPORATION, PETITIONER v. COMMISSIONER                                        OF
                                                     INTERNAL REVENUE, RESPONDENT
                                                        Docket No. 9458–10.                   Filed February 29, 2012.

                                                  P is a corporation exempt from tax under I.R.C. sec.
                                                501(c)(3) since the inception of that rule in 1954. P had paid
                                                unrelated business income tax for 1952, 1953, 1954, 2000, and
                                                2001. In 1961 P established an employee pension plan. Upon
                                                termination of the plan in 2002, a direct transfer of
                                                $1,470,465 was made from the plan to a replacement plan
                                                pursuant to I.R.C. sec. 4980(d). Thereafter, P received a rever-
                                                sion of $4,411,395 in cash and property. P reported a rever-
                                                sion amount of $14,055 and paid $2,811 as excise tax pursu-
                                                ant to I.R.C. sec. 4980(a). I.R.C. sec. 4980(a) imposes an excise
                                                tax of 20% of the amount of any employer reversion from a
                                                qualified plan. Pursuant to I.R.C. sec. 4980(c)(1), ‘‘The term
                                                ‘qualified plan’ means any plan meeting the requirements of
                                                section 401(a) or 403(a), other than—(A) a plan maintained by
                                                an employer if such employer has, at all times, been exempt
                                                from tax under subtitle A’’. P argues it has, at all times, been
                                                exempt from tax under I.R.C. subtit. A. Therefore, the rever-
                                                sion was not received from a qualified plan and it is exempt
                                                from excise tax. R argues that P was taxed on unrelated busi-
                                                ness income and has not, at all times, been exempt from tax
                                                under I.R.C. subtit. A. Therefore, the reversion is from a
                                                qualified plan and is subject to excise tax under I.R.C. sec.
                                                4980(a). Held: P has, at all times, been exempt from tax under
                                                I.R.C. subtit. A and is not liable for the excise tax imposed by
                                                I.R.C. sec. 4980(a). Held, further: We lack jurisdiction to
                                                award P a refund of its overpayment of excise tax.

                                      192




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                                      (192)                   RESEARCH CORP. v. COMMISSIONER                                           193


                                           John Frederick Daniels, III, for petitioner.
                                           Annie Lee and Peter James Gavagan, for respondent.

                                                                                  OPINION

                                         HAINES, Judge: Respondent determined a deficiency of
                                      $879,468 in petitioner’s Federal excise tax for 2003. The
                                      issues for decision after concessions are: (1) whether peti-
                                      tioner is liable for excise tax under section 4980 1 for 2003 on
                                      a reversion received from an employee pension plan, and (2)
                                      if we find that petitioner is not liable for excise tax under
                                      section 4980, whether petitioner is entitled to an overpay-
                                      ment credit or refund.

                                                                                Background
                                         The parties submitted this case fully stipulated pursuant
                                      to Rule 122. The parties’ stipulation of facts, with attached
                                      exhibits, are incorporated herein by this reference. At the
                                      time the petition was filed, petitioner was a New York cor-
                                      poration with its principal place of business in Tucson,
                                      Arizona.
                                         Petitioner is a nonprofit corporation incorporated in New
                                      York in 1912 and authorized to do business in Arizona. Peti-
                                      tioner is, and has been since the enactment of the income
                                      tax, exempt from Federal income tax under what is now sec-
                                      tion 501(c)(3). Petitioner was classified as a private founda-
                                      tion pursuant to a ruling letter from the Internal Revenue
                                      Service (IRS) dated October 31, 1986. Thereafter petitioner
                                      was reclassified as a section 4942(j) operating private founda-
                                      tion pursuant to a ruling letter from the IRS dated June 25,
                                      1987.
                                         In 1961 petitioner established the Research Corporation
                                      Employees Pension Plan (plan). The plan has been amended
                                      and restated from time to time and has received favorable
                                      determination letters from respondent. On July 21, 1999,
                                      petitioner sent a private letter ruling request pursuant to
                                      Rev. Proc. 99–4, 1999–1 C.B. 115, to respondent with respect
                                      to the taxability under sections 511 and 4980 of an asset
                                        1 Unless otherwise indicated, all section, chapter, subchapter, part, and subtitle references are

                                      to the Internal Revenue Code (Code), as amended and in effect for the year at issue, and all
                                      Rule references are to the Tax Court Rules of Practice and Procedure. Amounts are rounded
                                      to the nearest dollar.




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                                      194                 138 UNITED STATES TAX COURT REPORTS                                     (192)


                                      reversion to the plan sponsor upon termination of a defined
                                      benefit plan.
                                         On July 12, 2000, petitioner provided to respondent a
                                      postconference submission of additional information pursuant
                                      to Rev. Proc. 2000–4, 2000–1 C.B. 115, with respect to its
                                      July 21, 1999, private letter ruling request. Petitioner also
                                      withdrew its request with respect to section 4980 in an
                                      October 2, 2000, letter to respondent. Respondent issued a
                                      private letter ruling on May 9, 2001, to petitioner in which
                                      he determined that the reversion of assets from the plan to
                                      petitioner would not constitute unrelated business taxable
                                      income (UBTI) under section 512(a) (1).
                                         On May 23, 2003, respondent issued petitioner a favorable
                                      determination letter with respect to the plan’s qualification
                                      under section 401(a) upon termination. Four days later,
                                      respondent issued another favorable determination letter
                                      with respect to the qualification of the plan, clarifying some
                                      issues and superseding his prior May 23, 2003, determina-
                                      tion letter.
                                         The plan terminated on May 31, 2002. At the time of its
                                      termination the plan held a potential gross reversion of
                                      $5,881,860. The plan made a direct transfer of 25% of the
                                      gross reversion, $1,470,465, to a qualified replacement plan
                                      under section 4980(d) known as the Research Corporation
                                      Employees’ Replacement Pension Plan and transferred the
                                      remainder of the assets making up the reversion, $4,411,395,
                                      to petitioner.
                                         Having withdrawn its ruling request on the section 4980
                                      issue, on August 22, 2003, petitioner filed a Form 5330,
                                      Return of Excise Taxes Related to Employee Benefit Plans,
                                      that reported a reversion amount received from the employee
                                      benefit plan of $14,055 and included a payment of $2,811 in
                                      excise taxes pursuant to section 4980(a). In an attachment to
                                      the Form 5330, petitioner asserted that because it had, at all
                                      times, been exempt from tax under subtitle A, it was not sub-
                                      ject to excise tax on the entire reversion pursuant to section
                                      4980(a) and (c)(1)(A). However, petitioner also stated on the
                                      attachment to Form 5330: ‘‘for purposes of this submission,
                                      however, Research Corporation accepts that a portion of
                                      reversion is subject to the section 4980 ‘to the extent’
                                      Research Corporation has been subject to UBIT [unrelated
                                      business income tax], based upon the proportion of UBTI




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                                      (192)                   RESEARCH CORP. v. COMMISSIONER                                           195


                                      received by Research Corporation in comparison to its other
                                      income’’. 2
                                         Petitioner based its calculation that only $14,055 of the
                                      total reversion of $4,411,395 was subject to the section 4980
                                      excise tax upon a ratio of unrelated business taxable income
                                      reported in all years over total income it received for the
                                      years 1988 through 2001. 3
                                         Respondent, on January 22, 2010, 4 issued a statutory
                                      notice of deficiency to petitioner in which he determined that
                                      petitioner had underreported the amount of the reversion
                                      subject to section 4980 excise tax by $4,397,340 5 and, accord-
                                      ingly, was liable for a deficiency in excise tax of $879,468 and
                                      a failure to pay addition to tax pursuant to section 6651(a)(2)
                                      of $219,867. 6

                                                                                 Discussion
                                      I. Burden of Proof
                                        As a general rule the taxpayer bears the burden of proving
                                      that the Commissioner’s determinations are erroneous. Rule
                                      142(a)(1); Welch v. Helvering, 290 U.S. 111, 115 (1933).




                                         2 Respondent argues that petitioner has conceded it is liable for the excise tax under sec. 4980

                                      by submitting Form 5330, reporting a reversion subject to tax of $14,055 and paying an excise
                                      tax of $2,811. We do not view either the submission of Form 5330 or the statement as a conces-
                                      sion. We note that all concessions are subject to the Court’s discretionary review and may be
                                      rejected in the interests of justice. See McGowan v. Commissioner, 67 T.C. 599, 607 (1976). If
                                      the submission of the Form 5330 and the statement contained therein can be viewed as a con-
                                      cession, we reject it. Petitioner has maintained throughout this proceeding in its petition and
                                      its briefs that it is not subject to excise tax.
                                         3 For 1952, 1953 and 1954 petitioner reported UBTI and paid tax thereon. For 2000 and 2001

                                      petitioner filed Forms 990–T, Exempt Organization Business Income Tax Return, reporting a
                                      total of $265,000 of unrelated debt-financed income (UDFI) upon which it paid unrelated busi-
                                      ness income tax. Respondent concedes that during all periods in which contributions were made
                                      to the plan, petitioner received no tax benefit because of its exempt status under sec. 501(c)(3)
                                      and because petitioner made no contributions to the plan in any period in which petitioner re-
                                      ceived UBTI or UDFI.
                                         4 The statutory notice of deficiency was issued more than 6 years after petitioner filed its

                                      Form 5530. The statute of limitations is an affirmative defense that must be specifically plead-
                                      ed. Petitioner did not raise the statute of limitations as an affirmative defense in its pleadings
                                      for the taxable year at issue. Accordingly, we find that petitioner has waived that defense. See
                                      Rule 39.
                                         5 Respondent calculated the underreported amount by subtracting the $14,055 petitioner re-

                                      ported as a reversion from the $4,411,395 reversion actually received.
                                         6 Respondent has conceded that petitioner is not liable for the sec. 6651(a)(2) addition to tax.




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                                      196                 138 UNITED STATES TAX COURT REPORTS                                     (192)


                                      II. Whether Petitioner Is Liable for Excise Tax Under Section
                                          4980
                                           A. Section 4980
                                         Congress enacted section 4980 as part of the Tax Reform
                                      Act of 1986, Pub. L. No. 99–514, sec. 1132, 100 Stat. at 2478,
                                      to impose an excise tax on any assets reverting to an
                                      employer maintaining a qualified plan. An employer rever-
                                      sion is the amount of cash and the fair market value of other
                                      property received, directly or indirectly, by an employer from
                                      a qualified plan. Sec. 4980(c)(2)(A). A tax rate of 50% applies
                                      to an employer reversion unless the employer establishes a
                                      qualified replacement plan before receiving the reversion. 7
                                      Sec. 4980(d). There is no dispute that petitioner established
                                      a qualified replacement plan pursuant to section 4980(d).
                                      Therefore, if the tax applies to petitioner’s reversion, the tax
                                      rate is reduced to 20%. Sec. 4980(a), (d)(1)(A).
                                         The excise tax is imposed only on employer reversions from
                                      ‘‘qualified plan[s]’’. The term ‘‘qualified plan’’ means any plan
                                      meeting the requirements of section 401(a) or 403(a), other
                                      than a plan maintained by an employer if such employer has,
                                      at all times, been exempt from tax under subtitle A. Sec.
                                      4980(c)(1)(A). The meaning of the emphasized language is in
                                      dispute.
                                         Petitioner claims that its plan is not a ‘‘qualified plan’’ as
                                      that term is defined in section 4980(c)(1)(A) because peti-
                                      tioner has been exempt from tax under subtitle A at all times
                                      during its existence. As a result, petitioner maintains that it
                                      is not liable under section 4980 for the 20% excise tax on the
                                      reversion it received upon termination of the plan.
                                      Respondent claims that the plan is a ‘‘qualified plan’’ because
                                      petitioner paid unrelated business income tax for the years
                                      1952, 1953, 1954, 2000, and 2001. Because the tax on unre-
                                      lated business income is a tax under subtitle A, respondent
                                      contends that petitioner has not, at all times, been exempt
                                      from tax under subtitle A.
                                         7 For a plan to qualify as a replacement plan, (1) 95% of the active participants in the termi-

                                      nated plan who remain as the employer’s employees after the termination must be active par-
                                      ticipants in the replacement plan, sec. 4980(d)(2)(A), and (2) in general, there must be a direct
                                      transfer from the terminated plan to the replacement plan of at least 25% of the maximum
                                      amount the employer could receive as an employer reversion without regard to the increased
                                      tax rate provisions of sec. 4980(d), sec. 4980(d)(2)(B).




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                                      (192)                   RESEARCH CORP. v. COMMISSIONER                                           197


                                         This Court is presented with a case of first impression:
                                      whether a section 501(c)(3) organization’s employee pension
                                      plan becomes a ‘‘qualified plan’’ for purposes of section 4980
                                      if the organization pays tax on unrelated business income.
                                           B. Statutory Interpretation
                                        The Supreme Court has held that ‘‘ ‘in any case of statu-
                                      tory construction, * * * [its] analysis begins with the lan-
                                      guage of the statute, * * * And where the statutory lan-
                                      guage provides a clear answer, it ends there as well’ ’’. Harris
                                      Trust & Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S.
                                      238, 254 (2000) (quoting Hughes Aircraft Co. v. Jacobson, 525
                                      U.S. 432, 438 (1999)). Similarly, the Supreme Court has
                                      stated that ‘‘where the language of an enactment is clear,
                                      and construction according to its terms does not lead to
                                      absurd or impracticable consequences, the words employed
                                      are to be taken as the final expression of the meaning
                                      intended.’’ United States v. Mo. Pac. R.R. Co., 278 U.S. 269,
                                      278 (1929). Thus we look to the specific language of the
                                      statute to determine whether it is clear and unambiguous.
                                        Both respondent and petitioner argue that section
                                      4980(c)(1)(A) is clear and unambiguous. However, it is the
                                      application of the statute upon which they disagree. We
                                      agree that the statute is clear and unambiguous. Thus the
                                      issue before us is whether petitioner ‘‘has, at all times, been
                                      exempt from tax under subtitle A’’.
                                           C. Whether Petitioner Has, at All Times, Been Exempt
                                              From Tax Under Subtitle A
                                        Chapter 1, subchapter F of subtitle A, titled ‘‘Exempt
                                      Organizations’’, contains a number of provisions relevant to
                                      our inquiry. Petitioner is, and has been at all times, an
                                      organization exempt from income tax before and after the
                                      enactment of section 501(c)(3). Section 501(a) provides that a
                                      section 501(c)(3) organization shall be exempt from taxation
                                      under this subtitle [subtitle A] unless such exemption is
                                      denied under sections 502 or 503’’. Sections 502 and 503 are
                                      inapplicable in this case. Furthermore, section 501(b) pro-
                                      vides that
                                      An organization exempt from taxation under subsection (a) shall be subject
                                      to tax to the extent provided in parts II, III, and VI of this subchapter,




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                                      but (notwithstanding parts II, III, and VI of this subchapter) shall be
                                      considered an organization exempt from income taxes for the purpose of
                                      any law which refers to organizations exempt from income taxes.

                                      Part III of subchapter F is the only part relevant to our
                                      inquiry as it sets forth the rules for taxation of UBTI.
                                         Section 511 imposes a tax on the UBTI of an organization
                                      described in section 501(c)(3). Section 512 defines UBTI as the
                                      gross income derived by an exempt organization from any
                                      unrelated trade or business regularly carried on by it, less
                                      certain deductions and modifications. Section 514(a) provides
                                      that income from unrelated debt-financed property is
                                      included in UBTI under section 512 and, as such, is subject
                                      to the unrelated business income tax provided by section 511.
                                         For 1952, 1953, and 1954 petitioner reported UBTI and paid
                                      tax thereon, and for 2000 and 2001 petitioner reported UDFI
                                      and paid unrelated business income tax thereon. Respondent
                                      argues that petitioner has paid unrelated business income
                                      tax under sections 511, 512, and 514 and that such payment
                                      of tax is a tax under subtitle A. Therefore, respondent con-
                                      tends that petitioner is not an employer who has, at all
                                      times, been exempt from tax under subtitle A as is required
                                      by section 4980(c)(1)(A).
                                         With respect to section 501(b), respondent argues that ‘‘the
                                      present case is not a revocation case; the Service is not
                                      seeking to revoke petitioner’s tax-exempt status under [sec-
                                      tion] 501(c)(3). Rather, at issue is the imposition of the excise
                                      tax pursuant to [section] 4980 which is contained in subtitle
                                      D’’. Therefore section 501(b) is irrelevant. Moreover,
                                      respondent claims that section 501(b) is inapplicable to sec-
                                      tion 4980(c)(1)(A), ‘‘which deals with excise, not income, tax’’,
                                      and ‘‘explicitly and clearly is concerned with whether the
                                      organization has ever not been exempt from tax under sub-
                                      title A’’.
                                         We disagree. We find that section 501(b) is directly on
                                      point and relevant to our inquiry into whether petitioner,
                                      has, at all times, been an organization exempt from tax
                                      under subtitle A. We also disagree with respondent’s reading
                                      of section 501(b). Respondent would like us to ignore the
                                      plain language of section 501(b), which provides that a sec-
                                      tion 501(c)(3) organization shall be subject to tax to the
                                      extent it has UBTI but, notwithstanding any unrelated busi-




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                                      ness income tax paid, the organization ‘‘shall be considered
                                      an organization exempt from income taxes for the purpose of
                                      any law which refers to organizations exempt from income
                                      taxes’’. (Emphasis added.) Section 4980(c)(1)(A) is a law
                                      which refers to organizations exempt from tax under subtitle
                                      A, i.e., income taxes. Respondent argues that section 501(b)
                                      deals only with whether an organization will maintain its
                                      tax-exempt status for purposes of subchapter F. We disagree.
                                      Congress did not limit section 501(b) to laws under sub-
                                      chapter F, chapter 1, or even subtitle A. Section 501(b) refers
                                      to ‘‘any law’’, which includes the entire Code. Section 501(b)
                                      helps inform our understanding of section 4980(c)(1)(A) by
                                      explaining when an organization is considered exempt from
                                      tax under subtitle A.
                                         We also disagree with respondent’s interpretation of sec-
                                      tion 4980(c)(1)(A). The statute provides that the term ‘‘quali-
                                      fied plan means any plan meeting the requirements of sec-
                                      tion 401(a) or 403(a) other than a plan maintained by an
                                      employer if such employer has, at all times, been exempt from
                                      tax under subtitle A’’. (Emphasis added.) Respondent con-
                                      tends that the statute requires us to find whether petitioner
                                      ‘‘has ever not been exempt from tax under subtitle A’’. The
                                      statute is worded in the positive, not in the negative as
                                      respondent contends. Nevertheless, we find that petitioner
                                      has never not been exempt from tax under subtitle A,
                                      because of the effect of section 501(b). Moreover, the statute
                                      does not require us to determine whether the employer has
                                      ever paid a tax under subtitle A. Rather it requires us to
                                      determine whether the employer has always been considered
                                      exempt from tax under subtitle A. It is a very important
                                      distinction given Congress’ enactment of section 501(b).
                                         Petitioner argues that respondent’s interpretation of the
                                      relevant language in section 4980(c)(1)(A), if applied to the
                                      identical language in other statutes, would create an absurd
                                      result. We agree. It is a well-established canon of statutory
                                      interpretation that ‘‘ ‘identical words used in different parts
                                      of the same act are intended to have the same meaning.’ ’’
                                      United States Nat’l Bank of Or. v. Indep. Ins. Agents of Am.,
                                      Inc., 508 U.S. 439, 460 (1993) (quoting Commissioner v. Key-
                                      stone Consol. Indus., Inc., 508 U.S. 152, 159 (1993)).
                                         A number of other statutes apply to an organization
                                      exempt from tax under subtitle A. Section 6672(a) imposes a




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                                      200                 138 UNITED STATES TAX COURT REPORTS                                     (192)


                                      penalty on any person who is required to collect, truthfully
                                      account for, and pay over a tax imposed by the Code and
                                      willfully fails to do so. However, ‘‘no penalty is imposed by
                                      subsection (a) on any unpaid, volunteer member of any board
                                      of trustees or directors of an organization exempt from tax
                                      under subtitle A’’ if such member serves in an honorary
                                      capacity, does not participate in day to day or financial oper-
                                      ations, and does not have actual knowledge of the failure on
                                      which such penalty is imposed. Sec. 6672(e) (emphasis
                                      added). Adopting respondent’s interpretation of section
                                      4980(c)(1)(A) would mean that a voluntary board member of
                                      a section 501(c)(3) organization who otherwise meets the
                                      requirements of section 6672(e) would still be liable for the
                                      penalty under section 6672(a) if the section 501(c)(3)
                                      organization incurred UBTI during the years in question. We
                                      find such an outcome to be at odds with the purpose of the
                                      statute.
                                         Similarly, section 457 provides that any amount of com-
                                      pensation deferred under an eligible deferred compensation
                                      plan, and any income attributable to the amounts so
                                      deferred, shall be includible in gross income only for the tax-
                                      able year in which such compensation or other income is paid
                                      or otherwise made available to the participant or other bene-
                                      ficiary, in the case of a plan of an eligible employer described
                                      in subsection (e)(1)(B). An eligible employer means any
                                      ‘‘organization (other than a governmental unit) exempt from
                                      tax under this subtitle.’’ Sec. 457(e)(1)(B) (emphasis added).
                                      Section 457 is part of subtitle A. Applying respondent’s
                                      interpretation of section 4980(c)(1)(A) to section 457(e)(1)(B)
                                      would lead to a result in which section 501(c)(3) organiza-
                                      tions would become ineligible for section 457 deferred com-
                                      pensation plans upon receiving UBTI.
                                         We find that petitioner is an organization that has, at all
                                      times, been exempt from tax under subtitle A. Therefore,
                                      petitioner’s plan is not a qualified plan for purposes of sec-
                                      tion 4980 and petitioner is not liable for the excise tax there-
                                      under.
                                           D. Legislative History
                                         Respondent alternatively argues that petitioner is not
                                      eligible for the exception under section 4980(c)(1)(A) because




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                                      (192)                   RESEARCH CORP. v. COMMISSIONER                                           201


                                      of the following statement of legislative history: ‘‘The agree-
                                      ment provides that the excise tax does not apply to a rever-
                                      sion to an employer that has at all times been tax-exempt.
                                      Of course, this exception does not apply to the extent that
                                      such employer has been subject to unrelated business income
                                      tax or has otherwise derived a tax benefit from the qualified
                                      plan.’’ H.R. Conf. Rept. No. 99–841 (Vol. II), at II–483 (1986),
                                      1986–3 C.B. (Vol. 4) 1, 483. Having found that section
                                      4980(c)(1)(A) is unambiguous, we do not rely on the legisla-
                                      tive history in making our decision. 8 However, since
                                      respondent has raised legislative history in his briefs, we will
                                      briefly address its relevance.
                                         Respondent argues that because the above-quoted state-
                                      ment uses the word ‘‘or’’ rather than ‘‘and’’, Congress
                                      intended that anytime an organization has been subject to
                                      unrelated business income tax it is automatically ineligible
                                      for the section 4980(c)(1)(A) exception. We do not agree with
                                      respondent’s argument. Respondent ignores the phrase ‘‘to
                                      the extent’’. That phrase limits the application of the legisla-
                                      tive history to a specific set of facts. When coupled with the
                                      phrase ‘‘or has otherwise’’ the legislative history addresses a
                                      set of facts where the tax-exempt organization, whether it
                                      incurred unrelated business income tax or not, derived a tax
                                      benefit from the qualified plan. Respondent has conceded
                                      that petitioner did not derive a tax benefit from the plan. In
                                      any event, as we have previously discussed, the statute is
                                      clear that an organization exempt from tax under subtitle A
                                      (i.e., petitioner) is exempt from excise tax under section
                                      4980(c)(1)(A). Respondent’s argument raises facts not present
                                      in our case and should be left to a future determination in
                                      which such facts are at issue.
                                         We find that the plan is not a qualified plan for purposes
                                      of section 4980 and petitioner is not liable for the excise tax
                                      thereunder.
                                      III. Whether Petitioner Is Entitled to an Overpayment Credit
                                           or Refund
                                        Having found that petitioner is not liable for the excise tax
                                      under section 4980, we now must turn to the issue of
                                        8 See Garcia v. United States, 469 U.S. 70, 76 n.3 (1984); Venture Funding, Ltd. v. Commis-

                                      sioner, 110 T.C. 236, 241–242 (1998), aff’d without published opinion, 198 F.3d 248 (6th Cir.
                                      1999).




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                                      202                  138 UNITED STATES TAX COURT REPORTS                                       (192)


                                      whether petitioner is entitled to an overpayment credit or
                                      refund for its payment of $2,811 in excise taxes under section
                                      4980.
                                         The Tax Court is a court of limited jurisdiction, and it may
                                      exercise its jurisdiction only to the extent authorized by
                                      statute. Sec. 7442; Commissioner v. Gooch Milling & Elevator
                                      Co., 320 U.S. 418, 420 (1943). This Court is authorized to
                                      redetermine the amount of a deficiency for a taxable period
                                      as to which the Commissioner issued a notice of deficiency
                                      and the taxpayer timely petitioned the Court for review. See
                                      secs. 6212, 6213, and 6214. This Court also has jurisdiction
                                      to determine the amount of any overpayment a taxpayer
                                      made for a year that is properly before the Court on a peti-
                                      tion to redetermine a deficiency. Sec. 6512(b)(1). If the Court
                                      determines that there is an overpayment and further deter-
                                      mines the amount of the overpayment that is refundable in
                                      accordance with section 6512(b)(3), the overpayment amount
                                      thus determined ‘‘shall, when the decision of the Tax Court
                                      has become final, be credited or refunded to the taxpayer.’’
                                      Sec. 6512(b)(1).
                                         Although we have determined that an overpayment exists,
                                      our jurisdiction to order a refund or credit of an overpayment
                                      is limited and depends upon when the taxes were paid. See
                                      secs. 6511(a) and (b), 6512(b); Commissioner v. Lundy, 516
                                      U.S. 235 (1996). Under section 6512(b)(3), we may order the
                                      credit or refund of an overpayment only if one of three condi-
                                      tions is met. 9 The first condition, set out in section
                                      6512(b)(3)(A), is that the tax be paid after the mailing of the
                                      notice of deficiency, which did not occur here. Petitioner
                                      made its $2,811 payment on August 22, 2003, and the notice
                                      of deficiency was mailed on January 22, 2010.
                                           9 SEC.   6512(b). OVERPAYMENT DETERMINED     BY   TAX COURT.—

                                                           *         *          *           *        *       *        *
                                             (3) LIMIT ON AMOUNT OF CREDIT OR REFUND.—No such credit or refund shall be allowed or
                                           made of any portion of the tax unless the Tax Court determines as part of its decision that
                                           such portion was paid—
                                                (A) after the mailing of the notice of deficiency,
                                                (B) within the period which would be applicable under section 6511(b)(2), (c), or (d), if on
                                             the date of the mailing of the notice of deficiency a claim had been filed (whether or not
                                             filed) stating the grounds upon which the Tax Court finds that there is an overpayment,
                                             or
                                                (C) within the period which would be applicable under section 6511(b)(2), (c), or (d), in
                                             respect of any claim for refund filed within the applicable period specified in section 6511
                                             and before the date of the mailing of the notice of deficiency—




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                                      (192)                      RESEARCH CORP. v. COMMISSIONER                                           203


                                         The second condition, set out in section 6512(b)(3)(B),
                                      allows a credit or refund of an overpayment if a claim for
                                      refund deemed filed on the date the notice of deficiency was
                                      mailed would have constituted a timely claim for refund of
                                      the overpaid amount under applicable limitations periods
                                      prescribed in section 6511(b)(2), (c), or (d). Since petitioner
                                      did not seek a refund before filing its petition, for purposes
                                      of section 6512(b)(3)(B) its claim is deemed filed on the date
                                      of the notice of deficiency, January 22, 2010.
                                         Section 6512(b)(3)(B) directs the Court’s attention to sec-
                                      tion 6511(b)(2), 10 which in turn instructs the Court to apply
                                      either a three-year or a two-year look-back period. Section
                                      6512(b)(3)(B) limits this Court’s jurisdiction to credit or
                                      refund an overpayment of taxes to taxes paid in either the
                                      three-year period or two-year period immediately preceding
                                      the date of the notice of deficiency, depending on whether the
                                      taxpayer qualifies for the three-year or two-year look-back
                                      period prescribed by section 6511(b)(2). A taxpayer qualifies
                                      for the three-year look-back period if the taxpayer filed a
                                      claim for refund within three years of the date the taxpayer
                                      filed its return. Petitioner’s claim is deemed filed on January
                                      22, 2010, the date of the notice of deficiency, more than three
                                      years after petitioner filed its Form 5330 on August 22, 2003.
                                      Thus, petitioner does not qualify for the three-year look-back
                                      period. A taxpayer qualifies for the two-year look-back period
                                      if the taxpayer did not file its claim for refund within three
                                      years of the date the taxpayer filed its return. Petitioner
                                      qualifies for the two-year look-back period. However, since
                                      petitioner paid its tax on August 22, 2003, more than two
                                      years before the filing of the notice of deficiency, we are fore-
                                      closed from issuing a credit or refund of the overpayment of
                                      taxes. Thus, the deemed claim under section 6512(b)(3)(B)
                                      offers no benefit to petitioner.
                                         The third condition, set out in section 6512(b)(3)(C), applies
                                      where an actual claim for refund, which is timely under sec-
                                      tion 6511, has been filed before the mailing of the notice of
                                      deficiency and either has not been disallowed or, if dis-
                                      allowed, was or could have been the basis of a timely refund
                                      suit as of the date of the notice of deficiency. In such cir-
                                      cumstances, any credit or refund is limited to taxes paid
                                           10   Sec. 6511(c) and (d) is not relevant to our inquiry.




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                                      204                 138 UNITED STATES TAX COURT REPORTS                                     (192)


                                      within the periods specified in section 6511(b)(2), (c), or (d)
                                      and before the date of the notice of deficiency. Petitioner filed
                                      its claim for refund as part of its petition on April 26, 2010,
                                      after the mailing of the notice of deficiency.
                                         We conclude that we lack jurisdiction to award petitioner
                                      a refund of its overpayment of excise tax.
                                         In reaching our holdings, we have considered all argu-
                                      ments made, and, to the extent not mentioned, we conclude
                                      that they are moot, irrelevant, or without merit.
                                         To reflect the foregoing,
                                                                     Decision will be entered for petitioner as to
                                                                   the excise tax but not as to the overpayment
                                                                   or refund.

                                                                               f




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