Form sent to wrong division ineffective

Article Abstract:

The Eleventh Circuit found in the 'Coggin' case that the revocation of consent by a taxpayer to prolong the limitations period on assessments was not acceptable because the taxpayer was not able to send the form to the appropriate IRS division. The taxpayer in this case completed two Forms 872-T to terminate the agreements stretching the limitations period for the years being examined but sent them to the collection division although he did indicate 'Attn: Chief Examination Division' on the certified mail return receipt. Upon finding out about this, the IRS gave him a notice of deficiency. The court did not acknowledge the taxpayer's limitations-period defense because the forms were mailed to the wrong office and were therefore invalid. The constructive notice of the mailing was also not considered because the IRS is not required to cross-check the address on each envelope it receives.

Tax administration and procedure, Tax administration

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Extension to assess survived bankruptcy

Article Abstract:

The Court of Appeals for the Fifth Circuit concurred with the decision of the Tax Court in the 'Bilski' case which holds that an extension of the limitations period survived bankruptcy. The taxpayers made an extension of the time to assess tax in Jan. 1986 and filed for bankruptcy three years after and subsequently got their discharge before the IRS assessed them of any deficiency. When the Service did find the 1982 tax deficiency later on and informed the taxpayers in Oct. 1989, they refused to pay the deficiency and submitted a petition to the Tax Court. They argued that the 1982 assessment was either time barred or discharged in bankruptcy. However, the court found that the extension consent was not an executory contract but a waiver of the taxpayers' affirmative defense. It also found no ground for the bankruptcy exception to the general rule.

Bankruptcy

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Check sent with extension request is payment, not deposit

Article Abstract:

The Ninth Circuit ruled in Ott, 81 AFTR2d 98-1536 that the remittance made by a taxpayer with the Form 4868 application for an extension for filing an individual income tax return was a payment of tax and not a deposit for limitations period. According to Sec 6511, a refund claim made due to a timely filed return must be filed either within three years from the date the return was filed or within two years from the date the tax was paid. Since the taxpayer concerned failed to file a return claim within the prescribed periods, the Court decided that the remittance made with the extension request was a payment. The IRS has since amended Form 4868 to rule for its acceptance even without paying the estimated tax liability and to clarify that any funds remitted with it will be considered a payment of tax.

Public Finance Activities, Personal Income Taxes, Personal income tax, Tax returns

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