Sandoval-Lua v. United States

In 2006, the IRS audited the Sandovals’ 2003-2005 tax returns. The Sandovals signed forms waiving their right to a notice of deficiency for the years 2003 and 2004, and consenting to extend the limitations period for the 2003 fiscal year through December 31, 2008. The Sandovals hired representation. On reconsideration, the IRS assessed deficiencies for 2003 and 2004 at $60,274 and $87,566. IRS agents continued to confer with the Sandovals’ representative to prepare amended returns. The Sandovals filed amended returns in 2008 for amounts they considered “substantially correct,” and requested abatements. They submitted checks and a letter from their representative stating that the checks should be applied to the Sandovals’ liability for 2003 and 2004, and that “any overpayment” should be contributed to other years’ outstanding amounts due. The IRS granted substantial abatements, such that the checks satisfied the Sandovals’ tax deficiencies from 2003 and 2004. In 2010, the Sandovals filed new amended returns for 2003 and 2004 seeking a full refund of funds remitted plus amounts applied as overpayments from other years, approximately $101,000. The IRS denied the claims. The Federal Circuit affirmed summary judgment for the IRS, rejecting arguments that the Sandovals withdrew consent to assessment without notice of deficiency and never received subsequent notice; the 2008 funds were applied after the three-year limitations period for assessment; or the 2008 funds were given as refundable deposits, not as tax payments. View "Sandoval-Lua v. United States" on Justia Law