# Research Corp. v. Commissioner

> United States Tax Court · February 29, 2012 · 138 T.C. 192

URL: https://www.frixlaw.com/law-library/cases/4339024

## Case

- **Full name:** Research Corporation, Petitioner v. Commissioner of Internal Revenue, Respondent
- **Court:** United States Tax Court
- **Decided:** February 29, 2012
- **Citations:** 138 T.C. 192; 138 T.C. No. 7; 2012 U.S. Tax Ct. LEXIS 8
- **Precedential status:** Published
- **Opinion:** Opinion by Haines
- **Judges:** Haines
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

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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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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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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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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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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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/4339024. Public record. Not legal advice.