                         T.C. Memo. 2006-273



                       UNITED STATES TAX COURT



                  RAYMOND WRIGHT, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent*



     Docket No. 6240-01L.               Filed December 26, 2006.


     Raymond Wright, pro se.

     Patricia A. Riegger, for respondent.



                 SUPPLEMENTAL MEMORANDUM OPINION


     VASQUEZ, Judge:    This case is before the Court on remand

from the U.S. Court of Appeals for the Second Circuit for further

consideration consistent with its opinion in Wright v.

Commissioner, 381 F.3d 41, 46-47 (2d Cir. 2004), vacating and



     *
        This opinion supplements Wright v. Commissioner, T.C.
Memo. 2002-312, vacated and remanded 381 F.3d 41 (2d Cir. 2004).
                                 - 2 -

remanding T.C. Memo. 2002-312.    Unless otherwise indicated, all

section references are to the Internal Revenue Code, and all Rule

references are to the Tax Court Rules of Practice and Procedure.

Background

      On March 27, 2003, in response to a payoff figure that

respondent gave him for his 1987 and 1989 tax liabilities,

petitioner made a voluntary payment of $15,550.    Respondent

applied $3,625 to petitioner’s 1987 tax liability.    This

satisfied petitioner’s 1987 tax liability in full.

      In Greene-Thapedi v. Commissioner, 126 T.C. 1 (2006), we

held that in section 6330 proceedings when the tax liability for

a particular year has been paid in full, we lack jurisdiction to

determine whether an overpayment exists or to order a refund or

credit for that year and we must dismiss that year as moot.

Petitioner’s case is before the Court pursuant to our section

6330 jurisdiction--it is not before the Court pursuant to our

section 6404 jurisdiction.   See id. at 12-13.    The parties do not

dispute that petitioner’s 1987 tax liability has been paid in

full.   Accordingly, we shall dismiss the 1987 year as moot.    See

id.

      Respondent applied the balance of the $15,550 March 27,

2003, payment to petitioner’s 1989 tax year.     Respondent alleges

that after applying the remaining $11,925 to petitioner’s 1989
                                - 3 -

tax year there remained a balance due of $1,659.38 which

consisted solely of interest.

     Although the March 27, 2003, payment was made during the

pendency of petitioner’s appeal, apparently neither party brought

this payment (or the satisfaction of petitioner’s 1987 tax year)

to the attention of the Court of Appeals, nor does it appear that

the Court of Appeals took it into account.   Furthermore, the

satisfaction of petitioner’s 1987 tax year was not brought to the

Court’s attention until after the second trial of this case in

2006.

     On October 13, 2004, the Court of Appeals issued its mandate

vacating and remanding the decision of this Court.   In remanding

this case to this Court for further proceedings, the Court of

Appeals ordered that such a proceeding should be confined to

consideration of the following issues (the four issues):   (a)

Whether petitioner’s 1993 tax refund was sent to him by the

Internal Revenue Service (IRS) in 1994; (b) if not, whether

petitioner timely received notice from the IRS that his refund

had not been applied to his 1987 and 1989 tax deficiencies; (c)

if not, whether petitioner’s current tax liability should be

consequently adjusted by, inter alia, an abatement of interest
                               - 4 -

pursuant to section 6404(e); and (d) in any case, whether the

current interest abatement that petitioner had already received

was correct in the light of (1) the IRS’s failure to give

petitioner the appropriate withholding credits for 1987 and 1989,

and (2) his June 21, 1994, payment of $6,681.22.

     On October 19, 2004, the Court ordered the parties to file,

on or before November 2, 2004, written status reports in which

the parties were to advise the Court of their positions regarding

the appropriate means for this Court to implement the mandate of

the Court of Appeals.   On November 2, 2004, respondent filed his

status report, and on November 5, 2004, petitioner filed his

status report (with a service date of November 2, 2004).    In his

November 2004 status report, respondent stated that he was

awaiting detailed transcripts of petitioner’s tax accounts to

address the four issues as outlined in the mandate of the Court

of Appeals.

     On February 2, 2005, the Court again ordered the parties to

file, on or before February 16, 2005, written status reports in

which the parties were to advise the Court of their positions

regarding the appropriate means for this Court to implement the

mandate of the Court of Appeals.   On February 15, 2005,

respondent filed his status report, and on February 18, 2005,

petitioner filed his status report (with a service date of

February 16, 2005).
                              - 5 -

     In his February 2005 status report, respondent stated that

(1) he had forwarded to petitioner copies of petitioner’s

transcripts of accounts which addressed the four issues as

outlined in the mandate of the Court of Appeals, (2) he had asked

petitioner to contact him as soon as possible to discuss the

same, (3) petitioner had not contacted respondent, and (4)

respondent was preparing computations pursuant to Rule 155 for

petitioner to review.

     In his February 2005 status report, petitioner (1) alleged

that inappropriate ex parte communications had taken place

between the Court and respondent, (2) complained about the date

petitioner’s November 2004 status report was filed, (3) alleged

that the Court of Appeals made conclusions regarding the four

issues outlined in its mandate rather than remanding the four

issues for further proceedings, and (4) stated that he received

on February 4, 2005, copies of his transcripts of accounts that

respondent had forwarded to him.

     Despite being ordered by the Court twice to advise the Court

of their positions regarding the appropriate means for this Court

to implement the mandate of the Court of Appeals, neither party

advised the Court what further proceedings he believed were

necessary to implement the mandate of the Court of Appeals.

     From the submitted status reports, it appeared to the Court

that in order to implement the mandate of the Court of Appeals a
                               - 6 -

trial with the presentation of testimonial and documentary

evidence might be required.   Accordingly, on March 30, 2005, upon

due consideration of and in order to implement the mandate of the

Court of Appeals, which remanded this case to this Court for

further proceedings, and for cause the Court ordered:     (A) The

parties to file status reports outlining proposed schedules for

the preparation of this case for trial in order to advise the

Court regarding the appropriate means for this Court to implement

the mandate of the Court of Appeals; (B) that the proposed

schedules shall include dates for:     (1) Filing any dispositive

motions on any issue; (2) completing of all discovery requests

and requests for admissions taking into account the scope of the

requests and the responses required, and to permit timely

responses to be served and, if required, filed; (3) filing all

motions to compel stipulation; (4) filing all motions to compel

discovery; (5) filing any motions with respect to the conduct of

the trial; (6) filing motions in limine; (7) exchanging by the

parties initial listings of transcripts, stipulations, and

documents that they would like considered by the Court during

remand proceedings; (8) providing the Court complete

identification of the parts of the record (transcripts,

stipulations of fact, and documents) that have previously been

marked as part of the record in this case that the parties would

like to be considered during remand proceedings; and (9) filing
                                 - 7 -

and completion of any other matters required to prepare for

trial; (C) that the parties advise the Court whether they

believed that a trial of this case will be necessary, that the

case may be disposed of by a motion for summary judgment, or that

the case may be submitted fully stipulated pursuant to Rule 122;

(D) that respondent’s and petitioner’s status reports shall be

limited to discussing their proposed schedules for the

preparation for trial of this case and advising the Court whether

they believe that a trial of this case will be necessary, that

the case may be disposed of by a motion for summary judgment, or

that the case may be submitted fully stipulated pursuant to Rule

122 in order for this Court to implement the mandate of the Court

of Appeals; and (E) that the status report shall not include any

arguments addressing the merits of four issues remanded to this

Court for further proceedings.    Respondent’s status report was

due on or before April 18, 2005.    Petitioner’s status report was

due on or before May 9, 2005.

     On April 19, 2005, respondent filed his status report with

the Court.   On May 13, 2005, petitioner filed his status report

with the Court.   Petitioner and respondent agreed that further

trial was not necessary and that this case could be disposed of

by a motion for summary judgment.    The parties advised the Court

that they each would file a motion for summary judgment by June

3, 2005.
                              - 8 -

     On May 26, 2005, the Court ordered the parties to file any

motions for summary judgment on or before June 17, 2005.

     On June 17, 2005, respondent filed a motion for summary

judgment, an affidavit in support of respondent’s motion for

summary judgment from Marie E. Small, and a declaration of Jeanne

Moisa, court witness coordinator, in support of respondent’s

motion for summary judgment, with attached Exhibit A, Certificate

of Assessments, Payments, and Other Specified Matters, for

petitioner’s 1990, 1991, 1992, 1993, and 1994 tax years, and

Exhibit B, Certificate of Assessments, Payments, and Other

Specified Matters, for petitioner’s 1987, 1988, and 1989 years.

That same day, petitioner filed a motion to submit case under

Rule 122.

     On June 27, 2005, petitioner filed a motion for summary

judgment with attached exhibits (transcripts and a letter).

     On September 19, 2005, the Court denied respondent’s above-

referenced motion for summary judgment, petitioner’s above-

referenced motion for summary judgment, and petitioner’s above-

referenced motion to submit case under Rule 122.

     On October 28, 2005, petitioner filed a motion for

reconsideration of the Court’s September 19, 2005, order denying

his motions for summary judgment and to submit the case without

trial under Rule 122.
                               - 9 -

     On November 7, 2005, the Court denied this motion.   We

stated:   (1) That at some time it might have been possible for

the parties to settle this matter after an informal meeting and

exchange of information, see Branerton Corp. v. Commissioner, 61

T.C. 691 (1974); (2) that it also might have been possible for

the parties to submit pursuant to Rule 122 the evidence necessary

to allow the Court to implement the mandate of the Court of

Appeals; and (3) that although the Court gave the parties ample

opportunity to resolve this case without additional trial, from

the motions and status reports submitted by the parties it was

evident to the Court that in order to implement the mandate of

the Court of Appeals a trial with the presentation of testimonial

and documentary evidence would be required.

     Additionally, the Court ordered petitioner and respondent to

present at the trial testimonial and documentary evidence to

establish:   (1) Whether the IRS sent petitioner his 1993 tax

refund in 1994; (2) if not, whether petitioner timely received

notice from the IRS that his refund had not been applied to his

1987 and 1989 tax deficiencies; (3) if not, whether petitioner’s

current tax liability should be consequently adjusted by an

abatement of interest pursuant to section 6404(e); (4) whether

the current interest abatement that petitioner had already

received was correct in the light of (a) the IRS’s failure to

give petitioner the appropriate withholding credits for 1987 and
                              - 10 -

1989, and (b) petitioner’s June 21, 1994, payment of $6,681.22;

and (5) how respondent computed the interest for the years in

issue.

     Furthermore, the Court ordered the case set for further

trial at a special session of the Court that was to commence on

January 26, 2006, and advised the parties that the Court would

not be inclined to grant any continuances in this case.

Additionally, the Court ordered the parties to identify the parts

of the record (transcripts, stipulations of fact, and documents)

that previously had been marked as part of the record in this

case and that the parties would like to be considered during

remand proceedings.   The Court also ordered that the evidence and

argument presented in all subsequent filings with the Court and

at the trial that was to be held during the January 26, 2006,

special session should be confined to the four issues as outlined

in the mandate of the Court of Appeals.

     On December 6, 2005, despite the Court’s statement in the

November 7, 2005, order that we would not be inclined to grant

any continuances in this case, respondent filed a motion for

continuance of trial.

     On January 5, 2006, after giving petitioner the opportunity

to file an objection (which he filed on January 3, 2006), we

denied respondent’s motion for continuance of trial.
                              - 11 -

     On January 26, 2006, petitioner filed a motion to sanction

respondent’s counsel, a motion to strike, and a motion to require

respondent to file motion to withdraw or substitution of counsel.

     On January 26, 27, and 30, 2006, the Court conducted further

trial of the case.

     On January 30, 2006, petitioner filed a motion for mistrial

or, in the alternative, to enforce Court Rules on withdrawal and

substitution of counsel, and other remedies.   The Court took this

motion and the three motions petitioner filed on January 26,

2006, under advisement.

     On May 1, 2006, respondent filed his opening brief, and on

May 3, 2006, petitioner filed his opening brief.   On June 15,

2006, respondent filed his reply brief, and on June 19, 2006,

petitioner filed his reply brief.

     On August 9, 2006, on account of our ongoing review of this

case, we ordered respondent to file, on August 28, 2006, a status

report stating (and containing documentation to support) whether

petitioner’s 1989 liability had been fully paid as of that date

and, if not, the amount of petitioner’s outstanding balance for

1989 as of that date.   Furthermore, we ordered petitioner to

file, on or before September 8, 2006, a reply to respondent’s

status report stating whether petitioner agreed with respondent’s

status report or, if petitioner disagreed with respondent’s

status report, stating (and containing documentation to support)
                             - 12 -

whether his 1989 liability had been fully paid as of August 28,

2006, and, if not, the amount of his outstanding balance for 1989

as of that date.

     In his August 28, 2006, status report, respondent stated:

(1) That petitioner’s balance due for 1989 as of August 28, 2006,

was $1,659.38; (2) that petitioner had paid his tax and additions

to tax for 1989 in full and that the balance due was interest;

(3) on March 27, 2003, petitioner paid $11,925 towards his 1989

tax year on the basis of an IRS employee’s misstatement that this

amount would pay his balance in full; (4) the payment, however,

resulted in a credit balance of $24.03 being reflected on

petitioner’s 1989 account; (5) petitioner’s 1989 account balance,

however, mistakenly did not include $442.63 of interest due (in

addition to the $11,925) as of March 27, 2003; (6) respondent

admitted that pursuant to section 301.6404-2(c), Example (11),

Proced. & Admin. Regs., quoting petitioner an incorrect balance

due was a ministerial error; (7) on September 14, 2005,

respondent issued petitioner an erroneous refund of $1,240.78 for

1989; and (8) on September 14, 2005, petitioner’s 1989 account

reflected a balance due of $90.

Discussion

     The extended proceedings of this case recounted supra have

brought to light the numerous misstatements and errors made by
                              - 13 -

respondent through the handling of petitioner’s 1987 and 1989 tax

years.

     For example, respondent represented to the Court that as of

the date of the filing of his reply brief following the trial of

this case in 2002 respondent had abated the interest associated

with petitioner’s withholding credit for 1989.     Wright v.

Commissioner, T.C. Memo. 2002-312 n.9.    On the basis of

respondent’s proffer, we stated:    “The record does not contain

evidence that the aforementioned interest has been abated;

therefore, we will incorporate respondent’s concession of this

issue into our decision.”   Id.    Respondent’s proffer to the

Court, however, was a misstatement.    As the Court of Appeals

stated:

     We also observe that Wright was entitled to receive an
     additional interest abatement based on the IRS’s
     failure to give him a proper withholding credit of
     $278.00 in 1989. The Tax Court’s decision stated that
     the IRS had represented that statutory interest related
     to this withholding credit would be abated. Wright II,
     2002 Tax Ct. Memo LEXIS 332 at *16 n. 9, 2002 WL
     31875118. Although the IRS assures us that an interest
     abatement has been credited to Wright for this 1989
     withholding credit, it has made no effort either to
     substantiate this claim in the appellate record or even
     to describe the amount of the abatement. [Wright v.
     Commissioner, 381 F.3d at 46 n.2.]

     During the appeal and remand, respondent and respondent’s

witnesses recounted numerous errors regarding the handling of

petitioner’s 1987 and 1989 tax years--and oftentimes neither

respondent nor the witness could account for how those errors
                                - 14 -

occurred.1   As recently as his August 28, 2006, status report,

respondent essentially admitted that the IRS made mistakes

regarding the computation of petitioner’s interest, including,

but not limited to, quoting petitioner an incorrect payoff figure

and sending petitioner an allegedly “erroneous” refund on account

of respondent’s erroneous calculations and a keystroke error by

an IRS employee.

     Another example is contained in respondent’s opening brief

and his August 28, 2006, status report.         In his opening brief,

respondent alleged that as of January 24, 2006, the amount of


     1
         The Court of Appeals stated:

     the IRS seemed equally unsure about several basic and
     crucial facts. The parties' confusion is
     understandable; the relevant timeline and tax amounts
     have been reconstructed using photocopied forms,
     computer screen printouts, and dot-matrix printouts of
     tax account balances. Many of these records have no
     supporting explanation (and therefore are inscrutable
     to any non-employee of the IRS), many are from time
     periods that are not the same, and even the documents
     that are from similar time periods often contain
     amounts that are inexplicably contradictory.

                        *   *   *   *   *   *   *

     This “21-R” report is a computer screen printout of
     approximately twenty lines of abbreviations,
     alphanumeric codes, dates, and digits that are
     indecipherable to us without additional explanation. *
     * * [Wright v. Commissioner, 381 F.3d 41, 44, 45 (2d
     Cir. 2004), vacating and remanding T.C. Memo. 2002-
     312.]

The Court of Appeals also noted that it had “doubts inspired by
the IRS’s past calculation errors against Wright’s account”. Id.
at 45.
                              - 15 -

interest systematically and manually assessed for 1989 on

petitioner’s tax account, after an alleged abatement of interest,

was $8,144.50.   In his August 28, 2006, status report, respondent

alleged that as of that date the outstanding balance due (i.e.,

interest due) on petitioner’s 1989 tax account was $1,659.38.

     Petitioner’s testimony (at both trials) was credible.    He

consistently testified and averred that he did not receive his

1993 refund.   Respondent contended, however, that petitioner

received his 1993 refund in 1995.   The documentary and

testimonial evidence respondent offered was contradictory,

contained numerous errors, and lacked credibility.   Furthermore,

this contention is a concession by respondent that petitioner was

correct and that respondent did not send the 1993 refund to

petitioner in 1994.

     Accordingly, with regard to the first question posed by the

Court of Appeals--whether the IRS sent petitioner his 1993 tax

refund in 1994--we conclude that it did not.   Furthermore, we

conclude that respondent never sent petitioner his refund for

1993.

     In his June 17, 2005, motion for summary judgment,

respondent did not answer the second and third questions posed by

the Court of Appeals--if not, whether petitioner timely received

notice from the IRS that his refund had not been applied to his

1987 and 1989 tax deficiencies; and if not, whether petitioner’s
                               - 16 -

current tax liability should be consequently adjusted by, inter

alia, an abatement of interest pursuant to section 6404(e).

     With regard to the second question posed by the Court of

Appeals--if not, whether petitioner timely received notice from

the IRS that his refund had not been applied to his 1987 and 1989

tax deficiencies--we conclude, on the basis of petitioner’s

credible evidence, respondent’s admissions, and the lack of

credibility of the documentary and testimonial evidence

respondent offered--which was contradictory and contained

numerous errors--that petitioner did not receive notice from the

IRS that his refund had not been applied to his 1987 and 1989 tax

deficiencies.

     With regard to the third question posed by the Court of

Appeals--if not, whether petitioner’s current tax liability

should be consequently adjusted by, inter alia, an abatement of

interest pursuant to section 6404(e)--we conclude, on the basis

of petitioner’s credible evidence, respondent’s admissions, and

the lack of credibility of the documentary and testimonial

evidence respondent offered--which was contradictory and

contained numerous errors--that petitioner’s current tax

liability should be adjusted by abating the interest for 1989

pursuant to section 6404(e).

     Since 1992, petitioner has repeatedly asked respondent for a

payoff figure so that he could pay the liabilities at issue in
                                - 17 -

full.     When he received a payoff figure from respondent, he paid

that amount.     In his August 28, 2006, status report, respondent

admitted that on March 27, 2003, petitioner was quoted an

incorrect payoff figure and this was a ministerial error pursuant

to the regulations.     See also Krugman v. Commissioner, 112 T.C.

230 (1999); Douponce v. Commissioner, T.C. Memo. 1999-398.

Accordingly, we conclude that for 1989 interest from March 27,

2003, to the present shall be abated.     We note, however, that we

lack jurisdiction to determine whether an overpayment exists or

to order a refund or credit for 1989 to the extent that the

amount of the abatement of interest exceeds the amount remaining

unpaid for 1989.     See Greene-Thapedi v. Commissioner, 126 T.C. 1

(2006).

        With regard to the fourth question posed by the Court of

Appeals--in any case, whether the current interest abatement that

petitioner had already received was correct in light of (1) the

IRS’s failure to give petitioner the appropriate withholding

credits for 1987 and 1989, and (2) his June 21, 1994, payment of

$6,681.22--on the basis of petitioner’s credible evidence,

respondent’s admissions, and the lack of credibility of the

documentary and testimonial evidence offered by respondent, which

was contradictory and contained numerous errors, that respondent

has failed to establish that the current interest abatement is

correct.
                            - 18 -

    As a final matter, we shall deny petitioner’s outstanding

motions.

    To reflect the foregoing,

                                       An appropriate order

                                  and decision will be entered.
