to the extent they encompass claims for the payment of overpayment interest on amounts previously credited or refunded by respondent."

Respondent draws a sharp distinction between underpayment interest and overpayment interest on the ground that the former has actually been paid by the taxpayer and can be part of an overpayment, whereas the latter has not been paid. According to respondent, a claim for overpayment interest imposed by section 6611 is merely a claim for an additional amount of interest for which the Government is allegedly liable. It is not a claim for an amount that has been overpaid and is legally due.

Respondent argues that a claim for additional overpayment interest under section 6611 falls under the general claims jurisdiction of the Federal District Courts and the Court of Federal Claims. Respondent asserts that a suit for the payment of overpayment interest with respect to overpayments that have previously been refunded or credited can be prosecuted in a U.S. District Court or the Court of Federal Claims, even while the Tax Court case involving the determination of further deficiencies or overpayments for the same tax period is pending. Respondent argues that section 6512(a), which provides the Tax Court with exclusive jurisdiction over the issues properly before it, does not preclude such a suit. According to respondent, a suit for recovery of overpayment interest with respect to overpayments that were not determined by the Tax Court is not a suit for an amount that can be refunded, and, thus, it is not, by definition, within the Court's jurisdiction.

Furthermore, respondent argues that section 6512(b)(4), which provides that the Court has no jurisdiction "to restrain or review any credit or reduction made by the Secretary under section 6402", deprives the Court of jurisdiction to consider claims for overpayment interest with respect to overpayments that were credited to a taxpayer's liabilities before the taxpayer filed a petition in this Court. Respondent argues:

To the extent petitioner claims that it was not credited with sufficient overpayment interest on the transferred credits because the liability to which the credit was transferred was not correctly computed, section 6512(b)(4) precludes the courts from considering petitioner's claim.

Finally, respondent argues that the overpayments petitioner seeks on the basis of overpayment interest do not fall within the Court's "supplemental jurisdiction” under section 6512(b)(2) or the Court's "auxiliary jurisdiction" in section 7481(c). Respondent argues that section 6512(b)(2) will not apply to petitioner's claims for overpayment interest because the underlying overpayment was not determined by the Court. Similarly, respondent argues that section 7481(c) will not apply because the overpayment interest petitioner seeks will not have been "involved" in an overpayment determined by the Court.

Our first difficulty with respondent's argument is the fact that it is mathematically impossible to compute the amount of underpayment interest, as to which respondent concedes that we have jurisdiction, separately and apart from the amount of overpayment interest, as to which respondent argues that we lack jurisdiction. As described above, underpayment interest is the interest computed under section 6601 on an interim underpayment in petitioner's account. Overpayment interest is the interest computed under section 6611 on an interim overpayment in petitioner's account. Thus, the underpayment interest charged to, and the overpayment interest allowed on, petitioner's account are both computed on the basis of the balance of petitioner's account as of a particular date.

Petitioner's account balance, on any given date, is composed not only of the positive and negative transactions booked to petitioner's account for the year, such as assessments (positive) and payments (negative), but also of the underpayment and overpayment interest that was previously computed and combined with the account balance. See section 6622(a), which provides that, for purposes of the Internal Revenue Code, interest is "compounded daily."

If the account balance on a particular date were to change, by reason of a change in the amount or the date of a transaction booked to the account, for example, then the amount, and possibly the kind, of interest computed as of that date would also change. Any such change would ripple through the account causing later interim balances, and the interest computed thereon, to change, and further causing a change in the aggregate amount of each type of interest; viz underpayment or overpayment. Compare app. 1 with app. 4. In

effect, the aggregate amount of each type of interest cannot be computed without considering all of the transactions that were booked to the account and without also considering all of the interest, whether overpayment or underpayment, that was previously computed and combined with earlier account balances.

As can be seen from the above, in order to compute the aggregate amount of underpayment interest, it is necessary for the Tax Court to review the same transactions, and interest thereon, as involved in the computation of overpayment interest. Thus, it would be impossible for the Court to exercise overpayment jurisdiction with respect to underpayment interest, unless the Court also had jurisdiction over overpayment interest. For the same reason, it would be impossible for a U.S. District Court or the Court of Federal Claims to exercise general claims jurisdiction over overpayment interest without considering all of the transactions booked to petitioner's account, including transactions that are at issue in the Tax Court case and the amount of underpayment interest charged to the account.

As noted above, respondent concedes, on the basis of Estate of Baumgardner v. Commissioner, 85 T.C. 445 (1985), that our jurisdiction to determine an overpayment under section 6512(b) includes an overpayment composed of interest on underpayments computed under section 6601. Respondent also concedes that the underpayment interest at issue in this case is indistinguishable from the interest that was at issue in Estate of Baumgardner. Respondent's motion papers do not address the fact that it is impossible to exercise jurisdiction over petitioner's overpayment claims composed of underpayment interest, in accordance with our Opinion in Estate of Baumgardner, unless we also have jurisdiction to determine an overpayment composed of overpayment interest.

The issue in this case is whether petitioner's overpayment claims based upon the amount of overpayment interest allowed by respondent involve an "overpayment" within the meaning of section 6512(b). There is no definition of the term "overpayment" in the Code, but in Jones v. Liberty Glass Co., 332 U.S. 524, 531 (1947), the Supreme Court defined the term for purposes of the statutory predecessor of section 6512(b) as “any payment in excess of that which is properly due." The Supreme Court said:

we read the word "overpayment" in its usual sense, as meaning any payment in excess of that which is properly due. Such an excess payment may be traced to an error in mathematics or in judgment or in interpretation of facts or law. And the error may be committed by the taxpayer or by the revenue agents. Whatever the reason, the payment of more than is rightfully due is what characterizes an overpayment. [Id.]

See also United States v. Dalm, 494 U.S. 596, 610 n.6 (1990), in which the Supreme Court stated that "The commonsense interpretation is that a tax is overpaid when a taxpayer pays more than is owed, for whatever reason or no reason at all.” We considered the definition of the term "overpayment” in Estate of Baumgardner v. Commissioner, supra. In that case, the parties settled the issues raised in a notice of deficiency after the personal representative had petitioned the Tax Court to redetermine the deficiency. They agreed that there was no deficiency and that the estate tax was less than the amount that had been paid.

The issue in that case was whether the term "overpayment" in section 6512(b) could include amounts that were paid as interest, pursuant to an installment payment plan under section 6166A. The Commissioner argued that the Court was without jurisdiction to decide issues concerning interest, and that the personal representative had to bring a separate action in a U.S. District Court or in the predecessor of the Court of Federal Claims to obtain a refund of the overpaid interest. Unlike the present case in which respondent argues that a suit in a U.S. District Court or the Court of Federal Claims can proceed during the Tax Court case, in Estate of Baumgardner the Commissioner acknowledged that such an action could be barred by expiration of the period of limitations on filing a claim for refund. See Estate of Baumgardner v. Commissioner, supra at 448, 452–453.

We held that the term "overpayment", as used in section 6512(b), includes interest and, accordingly, we held that "we have jurisdiction to consider interest as part of an 'overpayment'". Id. at 458-459. In coming to that conclusion, we noted that section 301.6611-1(c), Proced. & Admin. Regs., expressly states that "the amount of any interest paid with respect to the deficiency *** is also an overpayment.” Id. at 452.

The principal justification for our holding in Estate of Baumgardner, however, was based on the symmetry of our

overpayment jurisdiction under section 6512(b) and the jurisdiction of the U.S. District Courts and the Court of Federal Claims. We pointed out that jurisdiction over overpayments generally rests with the U.S. District Courts and the Court of Federal Claims, but in the limited circumstances that the Tax Court is given overpayment jurisdiction, i.e., in situations where a notice of deficiency has been issued and the taxpayer has petitioned for review, section 6512(a) provides that the Tax Court should be able to determine an overpayment to the exclusion of the other tax forums. Id. at 451-452. We noted that this intent would be frustrated by reading section 6512(b) to provide that the overpayments which are the subject of the Tax Court's jurisdiction are substantially dif ferent from the overpayments which are subject to the jurisdiction of the other tax forums. Id. at 451. Stated differently, we noted that the "overpayment" determined by the Tax Court should be synonymous with that determined by a U.S. District Court or the Court of Federal Claims. We further noted that

we must

With respect to interest which is part of an overpayment, be able to determine all components of that overpayment or a taxpayer unwittingly may not be able to recover interest in those situations where the Commissioner initially determined a deficiency and the taxpayer petitioned to the Tax Court. *** [Id. at 453.]

In Estate of Baumgardner v. Commissioner, 85 T.C. 445 (1985), we overruled two Opinions of the Court which had held that the words "an overpayment of tax", in the predecessor of section 6512(b), excluded interest. Id. at 456. In discussing those Opinions, we said the following:

There was no compulsion to so restrictively read this language. This Court could have read the phrase "overpayment of tax" as part of the threshold necessary to be able to further enable the Tax Court "to determine the amount of such overpayment." There was no compelling reason to interpret the word "tax" to exclude additions to the tax or interest. There was, instead, reason to consider interest as part of an overpayment.

*** But these opinions have failed to recognize that Congress has legislatively provided for the exceptional situation where, after a deficiency has been determined and the taxpayer has petitioned the Tax Court, an overpayment results. Although there is no legislative history to assist us, it is hard to imagine that Congress could have intended to bifurcate an "overpayment" by limiting the taxpayer's refund to "tax" only. It is equally hard to imagine that an "overpayment" has a different meaning depending upon