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THE IRS AIN'T SANTA CLAUS

December 23, 2003

The IRS mailed Yancy K. Young a $500 refund he didn't ask for and wasn't entitled to. When they realized their mistake, they asked for it back. Mr. Young apparently had grown fond of the $500, and declined to return it.

The issue ended up in Tax Court, where Mr. Young made the novel argument that the payment was a "gift" from the IRS. Just in time for Christmas, the Tax Court settled the issue:

Petitioner contends that respondent’s erroneous refund was a gift to him. While respondent has the authority to make a refund of overpayments, see sec. 6402(a), we are unaware of any provision that authorizes him to make gifts. Furthermore, we would be hard pressed to find that respondent made the payment based on a detached and disinterested generosity, out of affection, respect, or admiration of petitioner so as to constitute a gift.

Well, you can't blame a guy for trying...

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