Krieger v. Comm'r of Internal Revenue, Docket No. 3489-74.

• Court: United States Tax Court
• Writing for the Court: RAUM
• Citation: 64 T.C. 214
• Parties: GORDON L. KRIEGER AND MARY E. KRIEGER, PETITIONERS v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT
• Docket Number: Docket No. 3489-74.
• Decision Date: 08 May 1975

64 T.C. 214

GORDON L. KRIEGER AND MARY E. KRIEGER, PETITIONERS
v.
COMMISSIONER OF INTERNAL REVENUE, RESPONDENT

Docket No. 3489-74.

United States Tax Court

Filed May 8, 1975.

[64 T.C. 214]

Gordon L. Krieger, pro se.

David M. Berman, for the respondent.

Where an erroneous refund has been made to a taxpayer in respect of an excessive carryback of a net operating loss, the Government has alternative remedies. The Commissioner may determine a deficiency in respect of the year of the refund, or the Government may proceed to recover the refund in a civil action brought in the name of the United States pursuant to sec. 7405. If the deficiency procedure is employed, the statute of limitations of sec. 6501(a) and (h) is applicable rather than the 2-year period specified in sec. 6532(b) relating to suits by the United States to recover erroneous refunds.

OPINION RAUM, Judge:

The Commissioner determined a deficiency of $623.03 in petitioners' income tax for the calendar year 1968. The deficiency is based upon an excessive net operating loss claimed for 1970 which resulted in an excessive carryback and refund for 1968. The fact that the refund for 1968 was excessive in the amount determined by the Commissioner is not in controversy, and the only matter in issue is whether the Commissioner was barred by limitations from determining the deficiency for 1968. All of the facts have been stipulated.

Petitioners are husband and wife and resided in Boca Raton, Fla., at the time they filed the petition herein. They filed joint income tax returns for the calendar years 1967, 1968, and 1970.

[64 T.C. 215]

Petitioners' return for 1970 was dated April 26, 1971, and was received by the Internal Revenue Service on May 10, 1971. On the basis of the items set forth in that return petitioners computed a claimed $7,431.65 net operating loss, and, on May 24, 1971, filed an application for a tentative refund predicated upon a carryback of that net operating loss. They in fact received a refund of $873.01 with interest, for a total of $907.01, for the year 1968. However, it is undisputed that the claimed $7,431.65 net operating loss for 1970 was excessive, and that when the correct amount ($5,031.98) was carried back, first to 1967, there remained a balance of $1,087.55 to be carried over to 1968. Accordingly, the recomputation for 1968 showed a tax liability $907.67 as against the tax liability of $1,157.65 appearing on petitioners' 1968 return. As a consequence, petitioners were...