Where the IRS has already collected the tax (or collected some amount of the total tax liability), the taxpayer may request a refund under section 6015(g)(1). See Minihan v. Commissioner, 138 T.C. 1, 8 (2012). Section 6015(g)(1) allows this Court to determine whether a taxpayer is eligible for a credit or refund.
However, before any taxpayer may be allowed a refund or credit, there must be a determination that the taxpayer has made an overpayment. Minihan v. Commissioner, 138 T.C. 1, 8 (2012). Section 6402(a) makes this expressly clear, stating:
Petitioner filed a motion for reconsideration. Petitioner asserts in his motion that the Court erred in concluding that he is not entitled to innocent spouse relief for 2004 and that the opinion is in conflict with the Court's Opinion in Minihan v. Commissioner, 138 T.C. 1 (2012), issued after the filing of the initial Summary Opinion in this case. A decision was entered on January 4, 2012.
Kushner described his experience with the mirroring procedure, which is not an unusual or unknown concept. See, e.g., IRS Revenue Manual Pt. 25.15.15.; Minihan v. Comm'r of Internal Revenue, 138 T.C. 1, 4-5, n.5 (2012), amended on reconsideration, 2012 WL 3338426 (T.C. Feb. 17, 2012) (explicating that mirrored accounts enable pursuit of collection against one spouse while suspending it against the other spouse, while any payments collected from one spouse are credited to both mirrored accounts); see also McElhaney v. Comm'r of Internal Revenue, 651 Fed.Appx. 256, 258 (5th Cir. 2016) (describing that the IRS set up “‘mirrored' accounts” as part of the innocent spouse process). In this case, while the penalty was removed from Susan Szanto's tax account, the penalty remained in Appellant's mirrored tax account.
Although the IRS created separate mirrored accounts, because Mrs. Schmidt requested Innocent Spouse Relief, the Schmidts' joint and several liability remains unaffected. See, e.g., Minihan v. Commissioner, 138 T.C. 1, 4 n.5 (2012) (noting "[m]irror[ed] accounts are currently created for . . . innocent spouse [cases]," and allow for pursuit of collection against one spouse while suspending it against the other—any payment collected from the non-requesting spouse would be credited to both mirrored accounts). Because the IRS's showing exceeds the minimal factual foundation necessary, the assessments receive a presumption of correctness and the burden of proof shifts to the Schmidts to demonstrate any error.
In his motion, respondent represents that the 2013 tax liability, for which petitioner made a claim for relief pursuant to I.R.C. section 6015, has been paid in full by petitioner's former spouse. See Minihan v. Commissioner, 138 T.C. 1, 2 n.2 (2012) (where the entire joint liability has been paid, petitioner's request for section 6015 relief is moot, since the IRS will engage in no more collection activity, unless a refund is possible). Furthermore, petitioner does not contend that she is entitled to a refund for the year at issue.
In his motion, respondent represents that the 2009 and 2010 tax liabilities, for which petitioner made a claim for relief pursuant to I.R.C. sec. 6015, has been paid in full by intervenor and the relief is no longer necessary. See Minihan v. Commissioner, 138 T.C. 1, 2 n.2 (2012) (where the entire joint liability has been paid, petitioner's request for section 6015 relief is moot, since the IRS will engage in no more collection activity, unless a refund is possible).
Therein, respondent moved to dismiss this case in part and to strike as to 2008 and 2009 on the ground that, subsequent to the filing of the petition underlying this proceeding, the liabilities for 2008 and 2009 for which petitioner made a claim for relief from joint and several liability under section 6015 of the Internal Revenue Code (I.R.C.) had been written off. See Minihan v. Commissioner, 138 T.C. 1, 2 n.2 (2012). Respondent further represented in the motion that petitioner had no objection to the granting thereof
It is true that a grant of relief from a joint liability that had previously been paid from joint assets may result in a refund to the requesting spouse if her payment (her portion of the joint payment) exceeded her recomputed liability and became an overpayment. See, e.g., Minihan v. Commissioner, 138 T.C. 1 (2012).
Even assuming arguendo that petitioner is eligible for relief under section 6015(b) or (f), he would not be entitled to a refund because he did not remit any tax payments to respondent with respect to the understatement. Before any taxpayer may be allowed a refund or credit, there must be a determination that the taxpayer made an overpayment. Minihan v. Commissioner, 138 T.C. 1, 8 (2012); Cutler v. Commissioner, T.C. Memo. 2013-119, at *27. A taxpayer makes an overpayment if he remits funds to the Secretary in excess of the tax for which he is liable. Jones v. Liberty Glass Co., 332 U.S. 524, 531 (1947); Minihan, 138 T.C. at 9. To prove that he has made an overpayment, the requesting spouse must establish that he (and not the nonrequesting spouse) provided the funds for the overpayment, and that the payments were not made with the joint return and were not joint payments or payments that the nonrequesting spouse made.