Research Corp. v. Commissioner

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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198 138 UNITED STATES TAX COURT REPORTS (192)

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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(192) RESEARCH CORP. v. COMMISSIONER 199

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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