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Full Opinion
United States Court of Appeals
Fifth Circuit
F I L E D
UNITED STATES COURT OF APPEALS
for the Fifth Circuit February 9, 2006
Charles R. Fulbruge III
Clerk
No. 05-60278
BARBARA DEATON,
Petitioner-Appellant,
VERSUS
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
consolidated with No. 05-60292
RONNY DEATON,
Petitioner-Appellant,
VERSUS
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
Appeals from the United States Tax Court
Before GARWOOD, DeMOSS, and BENAVIDES, Circuit Judges.
DeMOSS, Circuit Judge:
Barbara and Ronny Deaton (the âDeatonsâ) appeal a decision of
the United States Tax Court (the âTax Courtâ) sustaining a finding
of the Internal Revenue Service Appeals Office (the âAppeals
Officeâ) that the Deatonsâ 1994 remittance of $125,000--which
accompanied their Form 4868 application for an extension of time to
file their 1993 tax return--was a âpayment,â not a âdeposit,â and
that as such, it could not be credited against the Deatonsâ
1994â1996 tax liabilities because it fell outside the âlook-back
periodâ of I.R.C. § 6511(b)(2)(A).
I. Facts and Proceedings
On April 15, 1994, the deadline for filing a 1993 U.S.
Individual Income Tax Return, the Deatons filed a Form 4868 with
the Internal Revenue Service (IRS) to extend the time for filing
their return. Form 4868, titled âApplication for Automatic
Extension of Time to File U.S. Individual Income Tax Return,â
automatically extends a taxpayerâs time to file his return if the
taxpayer meets certain conditions; however, it does not extend the
time to pay tax. See Treas. Reg. § 1.6081-4(b) (1993) (â[A]ny
automatic extension of time for filing an individual income tax
return . . . shall not operate to extend the time for payment of
any tax due on such return.â).1 To qualify for a Form 4868
automatic extension of time to file, the Deatons had to â[p]roperly
estimate [their] 1993 tax liability using the information available
1
The 1993 version of Form 4868 clearly stated under its title,
âThis is not an extension of time to pay your tax.â I.R.S. Form
4868 (OMB No. 1545-0188) (1993).
2
to [them], [e]nter [their] tax liability on line 1 of Form 4868,
[and] [f]ile Form 4868 by the due date of [their] return.â I.R.S.
Instructions for Form 4868 (Cat. No. 15385N) (1993); see also
Treas. Reg. § 1.6081-4(a)(4) (1993) (âSuch application for
extension must show the full amount properly estimated as tax for
such taxpayer for such taxable year . . . .â). Although the Deatons
were not required to remit any amount to the IRS with their form,
see I.R.S. Instructions for Form 4868 (Cat. No. 15385N) (1993) (âIf
you find you canât pay the full amount shown on line 3, you can
still get the extension.â),2 the instructions to Form 4868
indicated that a taxpayer would be liable for interest and possibly
a late payment penalty if he submitted less than the full amount of
estimated taxes with his form, id.
To avoid incurring interest and any late payment penalty, the
Deatons submitted to the IRS with their Form 4868 a check in the
amount of $125,000, which they calculated as the line 3 âbalance
dueâ after deducting payments of $13,883 (in the form of
withholdings) from their estimated tax liability of $138,883.
Following receipt of the form, the IRS extended the Deatonsâ
deadline for filing their 1993 return by six months; however, the
2
Until 1992, full payment was a condition of receiving an
extension; however, the IRS removed that condition in 1992 so that
taxpayers who were unable to pay the full amount of estimated taxes
could nevertheless obtain an automatic four-month filing extension
and relief from late-filing penalties. See I.R.S. Notice 92-22,
1993-1 C.B. 305.
3
Deatons missed the extended deadline and in fact did not file their
1993 return until January 2000, nearly six years after its due
date. The Deatons also failed to file timely returns for the tax
years 1994, 1995, and 1996.
On January 10, 2000, the Deatons filed delinquent returns for
the tax years 1993 through 1996. On their 1993 return, they
reported a tax liability of only $88,662, which indicated that they
had overestimated their 1993 tax liability on Form 4868 by $50,221.
The Deatons requested that this overpayment be carried forward and
credited as a payment toward their tax liabilities for the years
following 1993.
Shortly after the IRS received the Deatonsâ 1993-1996 tax
returns, it formally assessed the amounts reported as tax on each
of the returns. For 1993, the IRS applied the amount already paid
by withholding ($13,883) and the April 1994 remittance ($125,000)
to the reported tax liability of $88,662. The IRS then posted the
resulting overpayment of $50,221 to an âexcess collectionsâ account
and did not carry it forward on the Deatonsâ account as a credit
for subsequent tax years as the Deatons requested. According to the
IRS, the Deatonsâ credit request was barred by I.R.C.
§ 6511(b)(2)(A), which limits the amount of a credit or refund
claimed by a taxpayer to the amount paid within the âlook-back
periodâ under that subsection, that is, the three years (plus the
period of any extension of time for filing the return) immediately
preceding the filing of the claim. I.R.C. § 6511(b)(2)(A). The
4
Deatons had paid nothing to the IRS within the applicable look-back
period, which dated back to July 10, 1996,3 so their credit was
limited to zero.
This litigation arose out of the IRSâs attempt to levy the
Deatonsâ property to satisfy their 1994â1996 tax liabilities, which
remained unpaid because of the IRSâs refusal to apply the 1993
overpayment as a credit in later years. After the IRS issued a
Notice of Intent to Levy, the Deatons timely filed a request for a
collection due process hearing with the IRS Appeals Office. In
their request for a hearing, the Deatons asserted that the 1994
remittance of $125,000 was a âdepositâ rather than a âpayment,â a
status that would have protected the remittance from the look-back
period for credits and refunds.4 The Appeals Office rejected the
Deatonsâ assertion, classified their 1994 remittance as a payment,
subject to I.R.C. § 6511(b)(2)(A)âs look-back period, and sustained
the IRSâs proposed levy.
The Deatons were likewise unsuccessful before the Tax Court.
3
Considering the six-month extension the IRS gave the Deatons to
file their 1993 return, the look-back period was the three years
and six months immediately preceding the date of their claim for a
credit, January 10, 2000.
4
See I.R.C. § 6511(b)(2)(A) (â[T]he amount of the credit or
refund shall not exceed the portion of the tax paid within the
period . . . .â (emphasis added)). The distinct treatment of
deposits and payments first arose in Rosenman v. United States, 323
U.S. 658 (1945), in which the Supreme Court recognized that
§ 6511âs predecessor was not applicable to a deposit even though it
would have been applicable to a payment. Dantzler v. United States,
183 F.3d 1247, 1249 (11th Cir. 1999).
5
Although the Tax Court acknowledged the judicially created
distinction between a deposit and a payment, the court also
recognized a three-way split of authority regarding the treatment
of a Form 4868 remittance. Applying its own precedent in Risman v.
Commissioner, 100 T.C. 191 (1993), which calls for an examination
of the facts and circumstances of a case in order to determine
whether the taxpayer intended his remittance as a deposit or a
payment, the Tax Court reviewed the Deatonsâ tax records and a
letter from their accountant asserting that the $125,000 was a
deposit. Finding that the Deatons had failed to demonstrate their
contemporaneous intent to treat the remittance as a deposit, the
Tax Court sustained the Appeals Officeâs finding that the Deatonsâ
remittance was a payment made outside the look-back period of
§ 6511(b)(2)(A) and upheld the Appeals Officeâs determination that
the IRSâs proposed levy could proceed. This appeal ensued. Because
we agree with the Tax Court that the Deatonsâ 1994 remittance was
a payment, rather than a deposit, we AFFIRM the Tax Courtâs
decision.
II. Discussion
A. Standard of Review
The sole issue on appeal is whether the Deatonsâ 1994
remittance of $125,000 was a payment or a deposit. This is a
question of law that we review de novo. San Antonio Sav. Assân v.
Commâr, 887 F.2d 577, 581 (5th Cir. 1989) (âThis court has
6
jurisdiction to review the decisions of the tax court âin the same
manner and to the same extent as decisions of the district courts
in civil actions tried without a jury.â We therefore examine this
decision as we do other summary judgment decisions. Because the
dispute concerns findings of law, we review on a de novo standard.â
(quoting 26 U.S.C. § 7482 (1982))). The Tax Courtâs factual
findings are reviewed for clear error. Sandvall v. Commâr, 898 F.2d
455, 458 (5th Cir. 1990).
B. Analysis
The Deatonâs argue on appeal that the $125,000 remittance that
accompanied their Form 4868 application for an extension of time to
file was a deposit and that as such, it is not subject to the look-
back period of I.R.C. § 6511(b)(2)(A). They ask this Court to
reverse the Tax Courtâs decision and order the IRS to apply their
1993 overpayment as a credit to their 1994â1996 tax liabilities or
refund the overpayment to them. The Deatons concede that if the
1994 remittance is properly classified as a payment, the IRS may
keep their overpayment because of § 6511(b)(2)(A)âs look-back
period.
In deciding this appeal, we must assess the impact of the
Supreme Courtâs recent decision in Baral v. United States, 528 U.S.
431 (2000), on this Circuitâs longstanding rule that remittances
made prior to assessment of a tax are deemed deposits rather than
payments. See Harden v. United States, 74 F.3d 1237 (5th Cir. 1995)
7
(unpublished); Ford v. United States, 618 F.2d 357 (5th Cir. 1980);
Thomas v. Mercantile Natâl Bank, 204 F.2d 943 (5th Cir. 1953). The
Deatons contend that Baral has no effect on their case or on our
longstanding rule because it is limited to cases involving
remittances governed by the âdeemed paidâ provision of I.R.C.
§ 6513(b)5--for example, wage withholdings and payments of
estimated tax--and they argue that their remittance does not fall
under that section. They urge that the proper characterization of
their remittance depends on the facts and circumstances associated
with it under Rosenman, which predates Baral. According to the
Deatons, the facts and circumstances surrounding their 1994
remittance establish their contemporaneous intent to treat it as a
5
Section 6513(b) states,
Prepaid income tax.--For purposes of section 6511 or 6512--
(1) Any tax actually deducted and withheld at the source
during any calendar year under chapter 24 shall, in respect of
the recipient of the income, be deemed to have been paid by
him on the 15th day of the fourth month following the close of
his taxable year with respect to which such tax is allowable
as a credit under section 31.
(2) Any amount paid as estimated income tax for any taxable
year shall be deemed to have been paid on the last day
prescribed for filing the return under section 6012 for such
taxable year (determined without regard to any extension of
time for filing such return).
(3) Any tax withheld at the source under chapter 3 shall, in
respect of the recipient of the income, be deemed to have been
paid by such recipient on the last day prescribed for filing
the return under section 6012 for the taxable year (determined
without regard to any extension of time for filing) with
respect to which such tax is allowable as a credit under
section 1462. For this purpose, any exemption granted under
section 6012 from the requirement of filing a return shall be
disregarded.
I.R.C. § 6513(b) (emphasis added).
8
deposit, and they assert that Fifth Circuit law at that time
supports such a finding.6 The Commissioner counters that after
Baral, we should treat remittances accompanying Form 4868
applications as payments as a matter of law; alternatively, the
Commissioner argues that the Tax Court correctly ruled under the
facts-and-circumstances test that the Deatonsâ remittance was a
payment, not a deposit. Because we have not previously explicitly
addressed Baralâs impact on our law,7 we do so here. And for the
reasons stated below, we agree that the Deatonsâ remittance was a
payment, not a deposit. However, we decline to adopt a per se rule
to govern remittances accompanying Form 4868 applications as the
Commissioner requests.
1. Origin of the DepositâPayment Distinction
The distinction between deposits and payments was first
established in Rosenman. In that case, the Supreme Court considered
whether the predecessor to the current look-back provision barred
a claim for refund of estimated estate taxes that the decedentâs
executors had remitted in response to an absolute deadline, but
6
Because this Circuit treated pre-assessment remittances as
deposits at the time the Deatons made their Form 4868 remittance,
they argue that it was intended as a deposit under then-current
law. This argument fails, as discussed in Part II.B.4.
7
Although we have decided a depositâpayment case since Baral, see
Harrigill v. United States, 410 F.3d 786 (5th Cir. 2005), we did
not discuss Baralâs impact on our law in that case because the
parties conceded that the Mercantile National Bank line of
authority, discussed below, was abrogated by Baral, see id. at 790
n.6.
9
which they strenuously disputed as erroneous. Rosenman, 323 U.S. at
659-61. The executors had included a transmittal letter with the
remittance, emphasizing that â[t]his payment is made under protest
and duress, and solely for the purpose of avoiding penalties and
interest, since it is contended by the executors that not all of
this sum is legally or lawfully due.â Id. at 660 (internal
quotation marks omitted). The IRS credited the remittance to a
special suspense account, which was created to hold the funds
because no taxes had yet been formally assessed against the estate.
Id. After completing an audit of the return nearly three years
later, the IRS formally assessed a deficiency. Id. When the
executors brought a claim for refund more than three years after
the remittance--but within three years of the IRSâs formal
assessment--the claim was rejected as time barred. Id. at 660-61.
In deciding that the taxes were not âpaidâ--and that the
limitations period therefore did not commence--until the tax was
actually assessed by the IRS, the Supreme Court specifically
considered all of the facts and circumstances surrounding the
executorsâ original remittance, including the executorsâ intent as
stated in the transmittal letter and the IRSâs treatment of the
remittance once received. Id. at 661-63. The Court determined that
when the executors submitted the remittance, they âdid not
discharge what [they] deemed a liability nor pay one that was
asserted. There was merely an interim arrangement to cover whatever
10
contingencies the future might define.â Id. at 662. Noting the
IRSâs deposit of the funds into a suspense account, the Court
concluded that â[m]oney in these accounts is held not as taxes duly
collected are held but as a deposit made in the nature of a cash
bond for the payment of taxes thereafter found to be due.â Id. The
Court ruled that considering the specific facts and circumstances
of the case, the remittance was a deposit and that the statute of
limitations therefore did not bar the executorsâ claim for refund.
Courts have since read Rosenman as creating a facts-and-
circumstances test for distinguishing between deposits and
payments. See, e.g., VanCanagan v. United States, 231 F.3d 1349,
1352-53 (Fed. Cir. 2000); Moran v. United States, 63 F.3d 663, 667-
68 (7th Cir. 1995); Blatt v. United States, 34 F.3d 252, 255 (4th
Cir. 1994); Ewing v. United States, 914 F.2d 499, 503-04 (4th Cir.
1990); Fortugno v. Commâr, 353 F.2d 429, 435-36 (3d Cir. 1965);
Risman, 100 T.C. at 197-99. However, this Circuit did not join
those courts in their reading of Rosenman.
2. Fifth Circuit Law Post-Rosenman
Our Circuit first applied Rosenman in Thomas v. Mercantile
National Bank, 204 F.2d 943 (5th Cir. 1953). The Mercantile
National Bank panel read the Rosenman decision as establishing a
rule that any amount remitted to the IRS prior to a formal
assessment of tax is, as a matter of law, a deposit. Id. at 944.
Citing Rosenman, the Court held a claim for refund timely because
11
[u]ntil the Commissioner certified the assessment
list . . . there was no deficiency assessment, and no
liability on the part of the taxpayer, and consequently
nothing to pay. The sum deposited with the
Collector . . . was merely an advance deposit to cover
additional tax liability expected to arise thereafter.
Neither the estateâs liability, nor the fact that there
was an overpayment could be determined until the
deficiency assessment was entered. It would be illogical
to hold, as the United States contends, that the statute
of limitation began to run against a claim for refund
before the deficiency itself came into existence, and
before the fact that there was an overpayment, and if so
the amount thereof, became ascertainable.
Id. Mercantile National Bank thus took Rosenman beyond its narrow
facts and circumstances, which the Supreme Court had specifically
emphasized in reaching its decision, and adopted a per se rule that
pre-assessment remittances are deposits.
Almost thirty years after Mercantile National Bank was
decided, a panel of this Court begrudgingly applied its per se rule
in Ford v. United States, 618 F.2d 357 (5th Cir. 1980), but not
without making clear its disagreement with Mercantile National
Bankâs holding: âDespite our view of Supreme Court precedent, the
course taken by our sister circuits, and appropriate tax policy, we
are constrained . . . by the bonds of Thomas v. Mercantile National
Bank at Dallas.â Id. at 358. After thoroughly discussing the
reasons for abandoning the rule and inviting the Court to
reconsider it en banc, the panel nevertheless applied Mercantile
National Bank as binding circuit precedent. Id. at 358-61. The
motion for rehearing en banc was denied. Ford v. United States, 625
12
F.2d 1016 (5th Cir. 1980).
Fifteen years later, the Fifth Circuit again addressed
Mercantile National Bank in Harden v. United States, 74 F.3d 1237
(5th Cir. 1995) (unpublished).8 The facts of Harden are virtually
identical to those of the instant case. The Hardens filed Form 4868
for both the 1984 and 1985 tax years, and they submitted
remittances with each filing. Harden, 74 F.3d at 1237. Several
years later, they filed their tax returns for those years,
indicating substantially lower tax liabilities than the amounts
previously remitted. Id. Like the Deatons, the Hardens sought to
apply the overpayments as credits for subsequent tax years, but the
IRS denied their request as time-barred. Id.
The government argued in Harden that Mercantile National Bank
and Ford were distinguishable because they did not address taxpayer
remittances accompanying Form 4868. According to the government, 26
U.S.C. § 6513 expressly defined such remittances as âpaymentsâ of
tax for purposes of the statute of limitations, so the remittances
were payments, not deposits, as a matter of law. Although the
Harden panel appreciated the governmentâs ârational and forceful
argument,â it concluded that it was âbound to the decisions of this
court in [Mercantile National Bank] and Ford. In those cases we
8
Although Harden was unpublished, it is considered precedent
because it was issued under our former rule concerning unpublished
opinions. See 5TH CIR. R. 47.5.3 (âUnpublished opinions issued before
January 1, 1996, are precedent.â (footnote omitted)).
13
held that as a matter of law a remittance forwarded to the IRS
before an assessment of tax is to be considered a deposit rather
than a payment.â Id.
3. Impact of Baral v. United States
We now hold that post-Baral, we are no longer bound by the
Mercantile National Bank line of authority. In Baral, the Supreme
Court explicitly rejected the taxpayerâs argument that a tax cannot
be âpaidâ until tax liability is assessed and thereby abrogated the
Mercantile National Bank rule that a pre-assessment remittance is
a deposit rather than a payment. Baral, 528 U.S. at 434, 437
(â[T]he Code directly contradicts the notion that payment may not
occur before assessment.â).9 The unanimous Court construed the
plain language of 26 U.S.C. § 6513(b)(1) and (2) as providing
unequivocally that two types of remittances, wage withholdings and
payments of estimated income tax, are to be âdeemed paidâ on the
due date of the tax return for the tax year in question, not when
formal assessment occurs. Baral, 528 U.S. at 434-36. This treatment
necessarily precludes the argument that all pre-assessment
remittances are deposits, the position that this Court took prior
to Baral and that the Deatons argue still prevails.
9
That the Baral Court was specifically addressing the Fifth
Circuitâs position as compared to those of various other circuits
supports a finding of abrogation. Id. at 434 (âIn view of an
apparent tension between [the Circuits], we granted certiorari.â);
see also Harrigill v. United States, 410 F.3d 786, 790 n.6 (5th
Cir. 2005) (not refuting the partiesâ concession that Baral
abrogated the Fifth Circuit rule).
14
According to the Deatons, Baral only applies to remittances
that fall under 26 U.S.C. § 6513(b), not to transmittals made with
Form 4868, and their position is bolstered by the Courtâs final
statement in Baral:
We need not address the proper treatment under § 6511 of
remittances that, unlike withholding and estimated income
tax, are not governed by a âdeemed paidâ provision akin
to § 6513(b). Such remittances might include remittances
of estimated estate tax, as in Rosenman, or remittances
of any sort of tax by a taxpayer under audit in order to
stop the running of interest and penalties. In the latter
situation, the taxpayer will often desire treatment of
the remittance as a deposit--even if this means
forfeiting the right to interest on an overpayment--in
order to preserve jurisdiction in the Tax Court, which
depends on the existence of a deficiency, a deficiency
that would be wiped out by treatment of the remittance as
a payment. We note that the Service has promulgated
procedures to govern classification of a remittance as a
deposit or payment in this context.
Id. at 439 n.2 (citations omitted). However, this statement does
not answer either (1) whether the Deatonsâ remittance is one that
is âgoverned by a âdeemed paidâ provision akin to § 6513(b)â or (2)
what the proper treatment is of remittances that are not âgoverned
by a âdeemed paidâ provision.â The Deatonsâ position is that a
remittance accompanying Form 4868 is not a remittance governed by
a deemed paid provision and that remittances not governed by a
deemed paid provision are subject to the facts-and-circumstances
test established in Rosenman.10 We take up this issue in subpart 4
10
The Deatons also complain that Baralâs application to their
case should be limited because the Mercantile National Bank rule
was the law at the time they made their $125,000 remittance.
However, we are not free to disregard Baral just because it was not
15
below.
Post-Baral, ours is the only circuit to have addressed the
deposit-payment distinction. In Harrigill v. United States, 410
F.3d 786 (5th Cir. 2005), we addressed facts similar to the instant
facts and held that the pre-assessment remittance at issue was a
payment, not a deposit. Harrigill, like the Deatons, had filed a
Form 4868 for the 1994 tax year and had submitted it with a
remittance of the amount of tax she estimated to be due, which was
later determined to be overstated. Id. at 787. Unlike the Deatons,
however, Harrigill filed her tax return for 1994 within the
limitations period, and the IRS duly credited her overpayment to
her estimated taxes for the 1995 tax year, the return for which she
had not yet filed. Id. at 787-88. When Harrigill later filed her
1995 return and found that she had again overestimated her tax
liability, she sought to have the overpayment--which resulted from
application of the first overpayment to her 1995 taxes--carried
over as a credit for 1996. Id. at 788. The IRS denied Harrigillâs
decided when the events leading to this appeal occurred:
When [the Supreme] Court applies a rule of federal law to the
parties before it, that rule is the controlling interpretation
of federal law and must be given full retroactive effect in
all cases still open on direct review and as to all events,
regardless of whether such events predate or postdate [the]
announcement of the rule.
Harper v. Va. Depât of Taxation, 509 U.S. 86, 97 (1993). This
argument is also foreclosed by our panel decision in Harrigill v.
United States, 410 F.3d 786 (5th Cir. 2005), which declined to
treat a pre-assessment remittance as a deposit even though that
remittance would have been treated as a deposit at the time it was
made under our pre-Baral precedent.
16
request as time-barred, a decision we upheld. Id. at 788, 792.
In upholding the IRSâs decision, we did not refute the
partiesâ concession that Baral abrogated the Mercantile National
Bank rule, id. at 790 n.6, an abrogation we now expressly
recognize, and we used a facts-and-circumstances approach to
determine whether the credit applied to Harrigillâs estimated taxes
for 1995 was an estimated payment of estimated income tax under
§ 6513(b)(2) subject to Baralâs rule that payments of estimated
income tax are âdeemed paidâ on the due date of the return without
extension, id. at 791-92. We did not address whether Harrigillâs
original remittance accompanying her Form 4868 application was a
deposit or a payment as a matter of law because we determined that
an application of credit, rather than a Form 4868 remittance, was
at issue. The instant case, however, clearly involves a Form 4868
remittance, and we must now address the question left unanswered in
Harrigill: Is a remittance submitted with a Form 4868 application
for an extension of time to file a payment as a matter of law? Or
is it subject to the facts-and-circumstances test of Rosenman?
After Baral, this is essentially an issue of first impression in
this Circuit; Harden, our prior Form 4868 case, which was based on
Mercantile National Bank, no longer controls.
4. The Deatonsâ Remittance
The primary issue in this case is the impact of Baral and
post-Baral law on the depositâpayment distinction. As discussed
17
above, Baral abrogated the rule established in Mercantile National
Bank. And the only post-Baral case to address the depositâpayment
distinction used a facts-and-circumstances test to determine
whether the remittance in question was a payment of estimated
income tax under § 6513(b)(2) subject to Baralâs rule that payments
of estimated income tax are deemed paid on the due date of the
return without extension. Harrigill, 410 F.3d at 791-92. We have
been called on here to decide what rule to apply post-Baral to
characterize a remittance made in conjunction with a Form 4868
application for an extension of time to file. The alternatives
offered are (1) a per se rule that all Form 4868 remittances are
payments and (2) a facts-and-circumstances inquiry that would
require a case-by-case analysis of any Form 4868 remittance made.
Like the Harrigill panel, we find it unnecessary to decide
whether a Form 4868 remittance is a payment as a matter of law
because we find that the Deatonsâ remittance of $125,000 in
conjunction with their Form 4868 application for an extension of
time to file constituted a payment of estimated income tax under
§6513(b)(2). We hesitate to adopt a per se rule in a case in which
the record clearly indicates that the taxpayersâ remittance was a
payment, not a deposit, and we therefore decline to do so. We leave
for another day the question of whether all Form 4868 remittances
should be treated as payments of estimated tax, even though we
recognize that several of our sister circuits have already answered
18
this question in the affirmative. See Dantzler v. United States,
183 F.3d 1247, 1251 (11th Cir. 1999); Ertman v. United States, 165
F.3d 204, 207 (2d Cir. 1999); Ott v. United States, 141 F.3d 1306,
1308-09 (9th Cir. 1998); Gabelman v. Commâr, 86 F.3d 609, 611-12
(6th Cir. 1996); Weigand v. United States, 760 F.2d 1072, 1074
(10th Cir. 1985). We agree with the Tax Court that even under the
facts-and-circumstances approach proposed by the Deatons, their
$125,000 remittance must be considered a payment of estimated tax.
See VanCanagan v. United States, 231 F.3d 1349, 1352-53 (Fed. Cir.
2000). As such, their remittance is âgoverned by a âdeemed paidâ
provisionâ and controlled by Baral.
In their 1993 Form 4868, the Deatons indicated that âthe
amount [they] exepect[ed]â to list as their 1993 tax liability was
$138,883 and that they had a âbalance dueâ of $125,000. The Deatons
remitted that $125,000. The Deatons submitted no contemporaneous
evidence supporting their contention that they intended this amount
to be a deposit when remitted; there is nothing on the face of the
document or on the check submitted with it indicating such an
intent. There is no evidence that the Deatons made an attempt to
use the IRS procedure for making a deposit. In addition, there is
no evidence suggesting that the Deatons were disputing their tax
liability as in Rosenman. The IRS has always treated their
overpayment as an âexcess collection.â At best, the record suggests
that the Deatons had difficulty estimating their tax liability and
19
needed more time to file their 1993 tax return. That they had
difficulty estimating their tax liability does not make their
remittance of estimated tax a deposit of the kind recognized by
Baral as retaining legal significance. Baral, 528 U.S. at 439 n.2.
We reject the Deatonsâ argument that in light of caselaw
prevailing at the time of their remittance, we must presume that
they intended to make a deposit. This argument requires that we
find that they had actual or presumed knowledge of the prevailing
law of this Circuit. They provide no factual evidence to support
such a finding. Furthermore, the Deatons provide no legal authority
to support their affirmative use of a presumption that a taxpayer
knows the law. Such a presumption is normally reserved to the
government in actions against taxpayers. See, e.g., Cheek v. United
States, 498 U.S. 192, 199 (1991). The Deatons provide no principled
reason for allowing the affirmative use of such a presumption
against the government, and we refuse to invent such a reason here.
We hold that on the facts and circumstances of this case, the
Deatonsâ remittance of $125,000 was an âamount paid as estimated
income taxâ under § 6513(b)(2), not a deposit.11 Under that
section, a remittance is deemed paid âon the last day prescribed
for filing the return under section 6012 for such taxable
year . . . .â I.R.C. § 6513(b)(2). Because the $125,000 was thus
11
Therefore, like the Baral Court, we need not address the
treatment of remittances not governed by a deemed paid provision.
Baral, 528 U.S. at 439 n.2.
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paid outside the look-back period of § 6511(b)(2)(A), the Deatons
cannot recover their overpayment. I.R.C. § 6511(b)(2)(A).
III. Conclusion
Accordingly, we AFFIRM the Tax Courtâs decision.
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