Borenstein v. Comm'r, 2017 U.S. Tax Ct. LEXIS 43

Petitioner (Borenstein) incurred a 2012 income tax liability; she made estimated and extension payments totaling $112,000, deemed paid on April 15, 2013.
She obtained a six‑month extension to file, making the extended due date October 15, 2013, but did not file a return by that date or for the next 22 months.
The IRS mailed a notice of deficiency on June 19, 2015; petitioner filed a delinquent return on August 29, 2015 that showed tax due of $79,559, producing a stipulated overpayment of $32,441.
The sole legal question was whether the Tax Court has jurisdiction to order a refund/credit of that overpayment under I.R.C. § 6512(b)(3) as limited by the lookback rules in § 6511(b)(2).
The 1997 amendment to § 6512(b)(3) added a final sentence that can, in some circumstances, provide a three‑year lookback for nonfilers; parties disputed how the parenthetical "(with extensions)" in that sentence should be construed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether petitioner qualifies for the three‑year lookback in the final sentence of I.R.C. § 6512(b)(3) so that her April 15, 2013 payments fall within the applicable period and an overpayment refund/credit is permitted	Borenstein: "with extensions" should modify "the third year" or "3 years" (or be read to add the extension period to the lookback), yielding a 3‑year or 3.5‑year lookback and entitling her to refund	Commissioner: plain reading has "with extensions" modify the immediately preceding noun "due date," so the third year is measured from the extended due date (Oct. 15, 2013); the notice (June 19, 2015) was not during that third year, so only the 2‑year lookback governs and the payments fall outside it	Court: adopts Commissioner; "with extensions" modifies "due date," petitioner was not mailed the notice "during the third year after the due date (with extensions)," and the court lacks jurisdiction to order refund/credit of the $32,441

Commissioner v. Lundy, 516 U.S. 235 (1996) (interprets § 6512(b)(3)(B) and applies 2‑year lookback to nonfilers; Supreme Court's construction prompted 1997 amendment)
Barnhart v. Thomas, 540 U.S. 20 (2003) (last‑antecedent rule: limiting clause ordinarily modifies nearest reasonable antecedent)
Lamie v. U.S. Trustee, 540 U.S. 526 (2004) (courts should not redraft statutes to correct drafting errors; deference to legislature)
Crooks v. Harrelson, 282 U.S. 55 (1930) (standard for invoking "absurd"‑results canon: result must "shock the general moral or common sense")