In Revenue Procedure 2017-28 the IRS clarified rules related to obtaining employee consents when an employer request a refund of overpaid FICA and RRTA taxes.  The procedure makes minor changes to the draft ruling issued along with Notice 2015-15.

The new procedure applies to consents requested on or after June 5, 2017.  Employers who have already issued requests for consents prior to that date will not need to send out new consent requests and it will not affect the validity of any consents received after that date that were requested prior to June 5.  Employers may still rely on the proposed revenue procedure found in Notice 2015-15 for consent request issued prior to June 5, 2017.

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In the case of Luque v. Commissioner, TC Memo 2016-128 the taxpayers had overpaid their 2011 tax. However, between the time the taxpayers filed a 2011 return in April of 2012 and when the IRS determined that the tax for 2011 was higher than that reported, the original overpayment amount had been applied by the IRS to an outstanding liability the taxpayers had for 2009.

At trial the IRS conceded that there was, in fact, no underreporting of tax for 2011 and so that the Tax Court should rule at this point that there is no tax due nor any overpayment on the 2011 return. The taxpayers, while agreeing they did not owe anything to the IRS wanted the Court to order the IRS to pay them the amount of the 2011 overpayment.

In the case of Terry v. Commissioner, TC Memo 2016-88, the taxpayer was disputing paying $550 in taxes that represented the increase in taxes shown as due on the amended return he had filed. 

That might seem usual, since Mr. Terry had admitted he had understated his 2011 taxes by $550.  However, Mr., Terry pointed out that his original return had shown a refund due of $1,745 and, in fact, the IRS had not yet sent those funds to him or applied them against taxes for another year.