                            T.C. Memo. 1999-327



                        UNITED STATES TAX COURT



                   KEITH LEE WILSON, Petitioner v.
            COMMISSIONER OF INTERNAL REVENUE, Respondent



       Docket No. 22103-96.               Filed September 29, 1999.



       Keith Lee Wilson, pro se.

       Jason M. Silver, for respondent.



               MEMORANDUM FINDINGS OF FACT AND OPINION


       JACOBS, Judge:   Pursuant to a notice of deficiency dated

July 8, 1996, respondent determined the following deficiencies in,

and additions to, petitioner’s Federal income taxes:

                                          Additions to Tax
Year            Deficiency        Sec. 6651(a)       Sec. 6654(a)

1988              $39,266           $6,567              $2,148
1992               52,996            3,407                 404
1993               24,699            6,102               1,021
                                       -2-

       On October 15, 1996, petitioner filed a petition placing years

1986 through 1994 at issue. On December 13, 1996, respondent filed

a motion to dismiss for lack of jurisdiction and to strike:                (1)

Years 1986, 1990, and 1994 on the ground that no deficiencies in

taxes for those years had been determined, and (2) years 1987,

1989, and 1991 on the ground that the petition with respect to

those years was untimely (those years were the subject of a notice

of deficiency dated June 4, 1996).             Petitioner conceded that a

notice of deficiency had not been issued for years 1986, 1990, and

1994, and therefore respondent's motion to dismiss those years for

lack    of   jurisdiction      was   appropriate.     However,    petitioner

maintained that dismissal for years 1987, 1989, and 1991 should be

based on the ground that the June 4, 1996, notice of deficiency was

not sent to his last known address.            We agreed with petitioner's

position     on   the   last   known    address    issue.   See   Wilson   v.

Commissioner, T.C. Memo. 1997-515.           We issued an order on December

3, 1997, dismissing: (1) Years 1986, 1990, and 1994 on the ground

that no notice of deficiency for those years had been issued, and

(2) years 1987, 1989, and 1991 on the ground that the notice of

deficiency for those years was invalid.

       Petitioner now seeks refunds for 1988 (in the amount of

$27,268) and 1992 (in the amount of $25,135) Federal income taxes.

The parties stipulated:        (1) For 1988, petitioner made estimated

tax payments of $5,000, and a remittance of $8,000 (included with
                                         -3-

petitioner's request for an extension of time to file his 1988

return), petitioner's tax liability is $5,859, and no additions to

tax are due; (2) for 1992, petitioner made payments (through

withholdings) totaling $39,368.97, petitioner's tax liability is

$41,300, and no additions to tax are due; and (3) for 1993, there

is no deficiency, additions to tax, or overpayment.

      The unresolved issues are:          (1) The amount of overpayment for

1988; (2) whether there is a deficiency or overpayment for 1992;

and   (3)    whether     the   statutorily     imposed   time   limitations    of

sections 6511 and 6512 preclude petitioner from obtaining refunds

for years 1988 and 1992 (if an overpayment exists for 1992).

      All section references are to the Internal Revenue Code in

effect for the years under consideration.            All Rule references are

to the Tax Court Rules of Practice and Procedure.

                                FINDINGS OF FACT

      Some    of   the    facts   have    been   stipulated     and   are   found

accordingly.       The stipulation of facts and the exhibits submitted

therewith are incorporated herein by this reference.

Background

      At the time petitioner filed his petition, he resided in

Pacific Palisades, California.             In 1974, petitioner received a

juris doctorate from UCLA.            He subsequently took graduate tax

courses at New York University School of Law but did not receive a

degree.
                                  -4-

     Since graduating from law school, petitioner has practiced law

in California.   At the time of trial, he worked out of his home and

was affiliated with several Santa Monica law firms, working in the

area of financial mergers and acquisitions.

1986 Federal Income Tax Return

     On January 30, 1990, petitioner filed his 1986 Federal income

tax return, electing to have a $1,177 overpayment for such year

applied to his 1987 tax return.

1987 Tax Year

     Petitioner made estimated tax payments of $2,500 each on April

15, June 15, and September 15, 1987.    On April 15, 1988, petitioner

(1) requested an extension of time (to August 15, 1988) to file his

1987 tax return, and (2) remitted $20,000 therewith.1

     Petitioner did not file a 1987 return.         Accordingly, on

February 22, 1993, the Internal Revenue Service (IRS) filed a

substitute 1987 return for petitioner based on payor information

documents.   On October 30, 1995, the IRS made a tax assessment for

the year 1987 in the amount of $12,751.    The IRS applied the $1,177

overpayment from 1986 to petitioner's 1987 tax liability.




     1
          The Internal Revenue Service credited $4,201 to
petitioner's then wife's account and $15,799 to petitioner's
account.
                                   -5-

1988 Tax Year

     For his 1988 tax year, petitioner made two estimated tax

payments of $2,500 each on June 17 and September 19, 1988.          On

April 15, 1989, petitioner requested (1) an extension of time (to

August 15, 1989) to file his 1988 tax return, and (2) remitted

$8,000 therewith.

     Petitioner did not file a 1988 return.      On March 1, 1993, the

IRS filed a substitute 1988 return for petitioner based on payor

information     documents.   The    parties   have   stipulated   that

petitioner's tax liability for 1988 is $5,859.

     No overpayment from 1987 was applied to petitioner's 1988 tax

obligation. The $13,000 ($5,000 estimated tax payments plus $8,000

remitted on April 15, 1989) was noted on the 1988 IRS records for

petitioner but was not applied to his 1988 tax obligation.

1989 Tax Year

     On September 15, 1989, petitioner made a $7,500 estimated tax

payment toward his 1989 tax year.        On April 15, 1990, petitioner

(1) requested an extension of time to file his 1989 return, and (2)

remitted $1,000 therewith.

     On March 8, 1993, the IRS filed a substitute 1989 return for

petitioner.   On April 30, 1995, the IRS received a 1989 return from

petitioner. On October 30, 1995, the IRS made a $14,261 tax

assessment for 1989.
                                 -6-

1990 Tax Year

     On September 13, 1992, respondent received petitioner's 1990

return. The return reflected a $3,209 overpayment to be applied to

petitioner's 1991 tax liability.       However, the amount of the

overpayment was based on a computational error; the correct amount

of the overpayment is $1,054.24.

1991 Tax Year

     Petitioner did not file a 1991 return.   Accordingly, on March

15, 1993, the IRS filed a substitute 1991 return for petitioner.

The $1,054.24 overpayment from 1990 was applied to petitioner's

1991 tax liability.

         On October 30, 1995, the IRS made a $35,957 tax assessment

for 1991.    The IRS gave petitioner credit for $37,433 in withheld

taxes.

     Petitioner elected to receive a refund in the amount of

$2,530.24 ($37,433 + $1,054.24 = $38,487.24; $38,487.24 - $35,957

= $2,530.24) with regard to 1991, which was mailed to petitioner on

April 27, 1998, with interest.

1992 Tax Year

     On April 15, 1993, petitioner requested an extension of time

to October 15, 1993, to file his 1992 return.

     Petitioner did not file a 1992 return.    On June 5, 1995, the

IRS filed a substitute 1992 return for petitioner from payor
                                  -7-

information documents.      Petitioner's tax liability for 1992 is

$41,300.

      For 1992, petitioner paid $39,368.97 in withheld income taxes.

Notice of Deficiency

      In the notice of deficiency mailed on July 8, 1996, respondent

determined that petitioner failed to file returns for 1988, 1992,

and 1993 and is liable for deficiencies and additions to tax for

those years in amounts stated earlier. The notice of deficiency is

based upon the substitute returns, and the deficiency computations

are based upon the allowance of the standard deduction and one

personal exemption.

                                OPINION

      As a consequence of the parties' stipulations with respect to

1993, the only disputed years are 1988 and 1992.               Petitioner

contends that he is entitled to refunds for both of these years.

Respondent agrees that petitioner would be entitled to a refund for

1988 but for the expiration of the period of limitations. However,

respondent disagrees with the amount of overpayment petitioner

claims.    For 1992, respondent maintains that petitioner is not

entitled to a refund, but rather, owes taxes.

      The task before us has been rendered more difficult because of

the   existence   of   computational   errors   and   other   mistakes   in

respondent's records regarding petitioner's 1986-93 tax years, and

the incoherent manner in which petitioner presented the facts.
                                     -8-

Nevertheless, we are able to ascertain from the record (sketchy as

it is) that petitioner overpaid his 1988 taxes and underpaid his

1992 taxes.

     For 1988, the parties stipulated that (1) petitioner made

estimated tax payments of $5,000, and remitted $8,000 with his

request for an extension of time to file his 1988 return, and (2)

petitioner's tax liability is $5,859.           Petitioner contends that in

addition to the $13,000 he sent to the IRS, he is entitled to the

benefit of overpayments from prior years (totaling $20,127) for

which he was not properly given credit, resulting in an aggregate

1988 overpayment of $27,268.2

     For tax year 1992, petitioner contends that he had a $25,7393

carryover payment from 1991 for which he was not properly given

credit.    Consequently,    petitioner     claims     he   is    entitled   to    a

$23,8084   refund    for   1992   ($39,368.97    +    $25,739     =   $65,108.97;

$65,108.97 - $41,300 = $23,808.97).

     Pursuant   to    section     6512(b)(1),    we   have      jurisdiction     to

determine the existence and amount of any overpayment of tax to be

credited or refunded for years that are properly before us.                      An


     2
          On brief, petitioner stated that he is due a refund for
1988 in the amount of $28,268 but made a $1,000 mathematical
mistake.
     3
          We are unable to ascertain how petitioner determined
the $25,739 carryover payment.
     4
          On brief, petitioner (making another mathematical
mistake) stated that his 1992 refund should be $24,135.
                                     -9-

"overpayment" is the excess of the amount of tax that has been paid

over the amount of tax that is properly due.          See, e.g., Bachner v.

Commissioner, 109 T.C. 125, 128-129 (1997), affd. without published

opinion 172 F.3d 859 (3d Cir. 1998).       However, where, as here, the

taxpayer failed to file 1988 or 1992 tax returns before the notice

of deficiency was mailed, our jurisdiction with regard to claimed

refunds is limited to taxes paid during the 2-year period prior to

the   date    the    notice   of   deficiency   was    mailed.   See   secs.

6511(b)(2),5 6512(b)(3)(B);6 Commissioner v. Lundy, 516 U.S. 235,

      5
          Sec. 6511(a) generally provides that a claim for credit
or refund of an overpayment of tax must be filed by the taxpayer
within 3 years from the time the return was filed or within 2
years from the time the tax was paid, whichever period expires
later. Sec. 6511(a) also expressly provides that, if no return
is filed, the claim must be filed within 2 years from the time
the tax was paid. Sec. 6511(b)(2) provides limitations on the
amount of any credit or refund, as follows:

             SEC. 6511.    LIMITATIONS ON CREDIT OR REFUND.

             (2) Limit on amount of credit or refund.--

                  (A) Limit where claim filed within 3-
             year period.--If the claim was filed by the
             taxpayer during the 3-year period prescribed
             in subsection (a), 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. If the tax was
             required to be paid by means of a stamp, the
             amount of the credit or refund shall not
             exceed the portion of the tax paid within the
             3 years immediately preceding the filing of
             the claim.

                    (B)   Limit where claim not filed within
                                                         (continued...)
                                 -10-




     5
      (...continued)
          3-year period.--If the claim was not filed
          within such 3-year period, the amount of the
          credit or refund shall not exceed the portion
          of the tax paid during the 2 years
          immediately preceding the filing of the
          claim.

               (C) Limit if no claim filed.--If no
          claim was filed, the credit or refund shall
          not exceed the amount which would be
          allowable under subparagraph (A) or (B), as
          the case may be, if claim was filed on the
          date the credit or refund is allowed.
     6
          Sec. 6512(b)(3) limits the amount of the credit or
refund as follows:

          SEC. 6512.   LIMITATIONS IN CASE OF PETITION TO 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--

               (i)   which had not been disallowed
               before that date,
                                                     (continued...)
                                 -11-

243-244 (1996);7 Wadlow v. Commissioner, 112 T.C. 247 (1999);   Hart

v. Commissioner, T.C. Memo. 1999-186; James v. Commissioner, T.C.

Memo. 1999-160.

     The notice of deficiency concerning petitioner’s 1988 tax year

was mailed on July 8, 1996, and petitioner did not file a 1988

return by that date.8    As a result, petitioner’s claimed refund is

limited to the amount of 1988 taxes he paid in the 2 years prior to

July 8, 1996.

     In 1988, petitioner made estimated tax payments of $5,000,

which are deemed to have been paid as of April 15, 1989.    See sec.

6513(b)(2).     In addition, petitioner remitted $8,000 with his

request for an extension of time to file his 1988 tax return.

     For purposes of resolving disputes as to whether a claim for

refund is time barred under section 6511, we must determine whether



     6
      (...continued)
               (ii) which had been disallowed
               before that date and in respect of
               which a timely suit for refund
               could have been commenced as of
               that date, or

                  (iii) in respect of which a suit
                  for refund had been commenced
                  before that date and within the
                  period specified in section 6532.
     7
          Although sec. 1282(a) of the Taxpayer Relief Act of
1997, Pub. L. 105-34, 111 Stat. 788, 1037, amended sec.
6512(b)(3) in response to the result in Commissioner v. Lundy,
516 U.S. 235 (1996), this amendment is inapplicable to the
instant proceeding because the amendment applies to claims for
credit or refund for taxable years ending after Aug. 5, 1997.
     8
          Petitioner is deemed to have filed his refund claim on
July 8, 1996, the date the notice of deficiency was mailed. See
sec. 6512(b)(3)(B).
                                    -12-

the remittance in question is a payment of tax or a deposit.             In

the instant case, there is no evidence in the record to indicate

petitioner intended either the $5,000 in estimated tax payments or

the $8,000 remittance included with his request for an extension of

time to file his 1988 tax return to be anything other than that

which it purports to be; namely, a payment against petitioner's

1988 tax liability.      Cf. Risman v. Commissioner, 100 T.C. 191

(1993).   Moreover, we are mindful that an appeal in this case lies

with the U.S. Court of Appeals for the Ninth Circuit, which in Ott

v. United States, 141 F.3d 1306 (9th Cir. 1998), stated that as a

matter of statutory construction, a remittance with a request for

an extension of time to file a tax return constituted a tax

payment, not merely a deposit.      Consequently, the Court of Appeals

held that the limitations period for seeking a refund of taxes paid

in Ott began to run at the time of remittance.            Id. at 1309.    A

similar   holding   is   required    in    this   case.   See   Golsen   v.

Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir.

1971).

     To summarize, petitioner's claimed overpayment for 1988 is

time barred.   See Commissioner v. Lundy, supra.

     With regard to 1992, petitioner had $39,368.97 in withheld

income taxes, which is deemed to have been paid on April 15, 1993.

See sec. 6513(b)(1). The parties have stipulated that petitioner's
                                 -13-

1992 tax liability is $41,300.    Thus, petitioner is liable for the

difference, or $1,931.03.9

     In reaching our holding herein, we have considered all of

petitioner's arguments. We conclude each of them is without merit.

     To reflect the foregoing and the stipulations of the parties,



                                        A decision will be entered

                                 that (1) for 1988 and 1993 there are

                                 no deficiencies, additions to tax, or

                                 overpayments, and (2) for 1992 there

                                 is a deficiency in tax in the amount

                                 of $1,931.03, but no additions to

                                 tax.




     9
          Assuming arguendo an overpayment for 1992 exists (as
contended by petitioner), such overpayment is barred by the
statute of limitations pursuant to secs. 6511(a), (b)(2), and
6512(b)(3)(B) (as discussed above with regard to 1988).
