HIGH COURT SAYS REMITTANCES FOR WITHHOLDING, ESTIMATED TAXES WERE 'PAID' IN YEAR RETURN WAS DUE.

                 SUPREME COURT OF THE UNITED STATES

[1] Internal Revenue Code section 6511(b)(2)(A) imposes a ceiling on the amount of credit or refund to which a taxpayer is entitled as compensation for an overpayment of tax: "[T]he amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return." 26 U.S.C. section 6511(b)(2)(A). We are called upon in this case to decide when two types of remittance are "paid" for purposes of this section: a remittance by a taxpayer of estimated income tax, and a remittance by a taxpayer's employer of withholding tax. The plain language of a nearby Code section, section 6513(b), provides the answer: These remittances are "paid" on the due date of the taxpayer's income tax return.

I

[2] The relevant facts are not disputed. Two remittances were made to the Internal Revenue Service toward petitioner David H. Baral's income tax liability for the 1988 tax year. The first, a withholding of $4,104 from Baral's wages throughout 1988, was a garden-variety collection of income tax by the employer, see section 3402. The second, an estimated income tax of $1,100 remitted in January 1989, was sent by Baral himself out of concern that his employer's withholding might be inadequate to meet his tax obligation for the year, see section 6654. In the ordinary course, Baral's income tax return for 1988 was due to be filed on April 15, 1989. Though he applied for and received an extension of time until August 15, Baral missed this deadline; he did not file the return until nearly four years later, on June 1, 1993. The Service, on July 19, 1993, assessed the tax liability reported on this belated return.

[3] On the return, Baral claimed that he (and his employer on his behalf) had remitted $1,175 more with respect to the 1988 taxable year than he actually owed. Baral requested that the Service apply this excess as a credit toward his outstanding tax obligations for the 1989 taxable year. The Service denied the requested credit. It did not dispute that Baral had timely filed the request under the relevant filing deadline -- "within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later." Section 6511(a); see section 6511(b)(1). But the Service concluded that the claim exceeded the ceiling imposed by section 6511(b)(2)(A). That provision states that "the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return." Ibid.; see generally Commissioner v. Lundy, 516 U.S. 235, 240 (1996) (explaining that section 6511 contains two separate timeliness provisions: (1) section 6511(b)(1)'s filing deadline and (2) section 6511(b)(2)'s ceilings, which are defined by reference to that provision's "look-back period[s]"). Since Baral had filed his return on June 1, 1993, and had earlier received a 4-month extension from the initial due date, the relevant look-back period under section 6511(b)(2)(A) extended from June 1, 1993, back to February 1, 1990 (i.e., three years plus four months). According to the Service, Baral had paid no portion of the overpaid tax during that period, and so faced a ceiling of zero on any allowable refund or credit.

[4] Baral then commenced the instant suit for refund in Federal District Court. That court sustained the Service's position and granted summary judgment in its favor. The Court of Appeals affirmed. App. to Pet. for Cert. A-1, judgt. order reported at 172 F.3d 918 (CADC 1999). The Court of Appeals looked to section 6513(b)(1), which states that amounts of tax withheld from wages "shall . . . be deemed to have been paid by [the taxpayer] on the 15th day of the fourth month following the close of his taxable year," and to section 6513(b)(2), which makes similar provision for amounts submitted as estimated income tax, and concluded that, under these subsections, both of the remittances at issue were "paid" on April 15, 1989. Accord, e.g., Dantzler v. United States, 183 F.3d 1247, 1250-1251 (CA11 1999) (estimated income tax); Ertman v. United States, 165 F.3d 204, 207 (CA2 1999) (same); Ehle v. United States, 720 F.2d 1096, 1096-1097 (CA9 1983) (withholding from wages). In view of apparent tension between this approach and a decision of the Court of Appeals for the Fifth Circuit, Ford v. United States, 618 F.2d 357, 360-361, and n. 4 (1980) (suggesting that a remittance respecting any sort of tax is "paid" under section 6511 only when the Service assesses the tax liability), we granted certiorari, 527 U.S. 1067 (1999).

II

[5] The parties renew before us the contentions advanced below. The Government submits that sections 6513(b)(1) and (2) unequivocally provide that the two remittances at issue were "paid" on April 15, 1989 for purposes of section 6511(b)(2)(A), so that they precede the look-back period, which, as noted, commenced on February 1, 1990. Baral, on the other hand, urges that a tax cannot be "paid" within the meaning of section 6511(b)(2)(A) until the tax liability is assessed (i.e., the value of the liability is definitively fixed). According to Baral, the requisite assessment might be made either when the taxpayer files his return (here June 1, 1993) or when the Service, under section 6201, formally assesses the liability (here July 19, 1993), though he seems to prefer the latter date. See Brief for Petitioner 9 ("Payment of the income tax . . . occurred at the earliest on June 1, 1993, when the amount of that tax first became known, and more precisely on July 19, 1993, when the income tax was assessed").

[6] We agree with the Government that section 6513(b)(1) and (2) settle the matter. We set out these provisions in full:

     "(b) Prepaid Income Tax

[7] Baral disputes this reading of section 6513(b). He claims that sections 6513(b)(1) and (2) establish a "deemed paid" date for payment of ESTIMATED tax and WITHHOLDING tax, but in no sense prescribe when the INCOME tax is "paid," which is the crucial inquiry under section 6511(b)(2)(A). According to Baral, withholding tax and estimated tax are taxes in their own right (separate from the income tax), and are converted into income tax only on the income tax return. (On this view, payment of the INCOME tax occurred no earlier than June 1, 1993, when Baral filed the return.) This reading is evident, he says, from the significance that the Treasury Regulations place on the filing of the return, see 26 CFR section 301.6315-1 (1999) ("The aggregate amount of the payments of estimated tax should be entered upon the income tax return for such taxable year as payments to be applied against the tax shown on such return"); section 301.6402-3(a)(1) (providing that "in the case of an overpayment of income taxes, a claim for credit or refund of such overpayment shall be made on the appropriate income tax return"), and from the fact that the Code's provisions regarding withholding and estimated tax are found in different subtitles (C and F, respectively) from the provisions governing income tax (A).

[8] We disagree. Withholding and estimated tax remittances are not taxes in their own right, but methods for collecting the income tax. Thus, section 31(a)(1) of the Code provides that amounts withheld from wages "shall be allowed to the recipient of the income as a credit against the [income] tax," and section 6315 states that "[p]ayment of the estimated income tax, or any installment thereof, shall be considered payment on account of the income taxes imposed by subtitle A for the taxable year." Similarly, one of the regulations cited by Baral explains that a remittance of estimated income tax "shall be considered payment ON ACCOUNT OF THE INCOME TAX for the taxable year for which the estimate is made." 26 CFR section 301.6315-1 (1999) (emphasis added). Baral's reading fails, moreover, to give any meaning to 26 U.S.C. section 6513. That section exists "[f]or purposes of section 6511," and section 6511 concerns credits and refunds, which result only when the aggregate of remittances (such as withholding tax and estimated income tax) EXCEED the tax liability, see section 6401. Thus, the concepts of credit or refund have no meaning as applied to Baral's notion of withholding taxes and estimated taxes as freestanding taxes. Not surprisingly, the caption to section 6513(b) describes withholding and estimated income tax remittances as "[p]repaid income tax."

[9] Taking a more metaphysical tack, Baral contends that income tax is "paid" under section 6511(b)(2)(A) only when the income tax is assessed -- here, June 1 or July 19, 1993, see supra, at 4 -- because the concept of payment makes sense only when the liability is "defined, known, and fixed by assessment," Brief for Petitioner 9. But the Code directly contradicts the notion that payment may not occur before assessment. See section 6151(a) ("[T]he person required to make [a return of tax] shall, WITHOUT ASSESSMENT or notice and demand from the Secretary, PAY such tax . . . at the time and place fixed for filing the return" (emphasis added)); section 6213(b)(4) ("Any amount PAID as a tax or in respect of a tax MAY BE ASSESSED UPON THE RECEIPT OF SUCH PAYMENT" (emphasis added)). Nor does Baral's argument find support in our decision in Rosenman v. United States, 323 U.S. 658 (1945), where we applied section 6511's predecessor to a remittance of estimated estate tax. To be sure, a part of our opinion seems to endorse petitioner's view that payment only occurs at assessment:

     "It is [the] erroneous assessment that gave rise to a claim for

[10] We observe, finally, that Baral's position -- to the extent he submits that payment occurs only at the Service's assessment -- would work to the detriment of taxpayers who timely file their returns and claim a refund or credit as compensation for an overpayment. The Service will not always assess the taxpayer's liability immediately upon receiving the return; the Service generally has three years in which to do so, see 26 U.S.C. section 6501(a) (1994 ed., Supp. III). The Code does allow for payment of interest to the taxpayer on overpayments once the return has been filed and the tax paid, 26 U.S.C. section 6611 (1994 ed. and Supp. III), but under Baral's view no interest could accrue during the time between the filing of the return and the Service's assessment. Fortunately for the timely taxpayer, the Code definitively rejects Baral's position in this setting. Section 6611(d) of 26 U.S.C. explains that the date of payment is determined according to the provisions of section 6513, which, as noted, supra, at 5, plainly set a deemed date of payment for remittances of withholding and estimated income tax on the April 15 following the relevant taxable year. ²

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[11] For the foregoing reasons, we affirm the judgment below.

[12] It is so ordered.

² We need not address the proper treatment under section 6511 of remittances that, unlike withholding and estimated income tax, are not governed by a "deemed paid" provision akin to section 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, see, e.g., Moran v. United States, 63 F.3d 663 (CA7 1995). 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, 26 U.S.C. section 6213 (1994 ed. and Supp. III), 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. See Rev. Proc. 84-58, 1984-2 Cum. Bull. 501.