On appeal from the Tax Court of New Jersey, Docket No. 011684-2009, whose opinion is published at 25 N.J. Tax 398 (Tax 2010).
The opinion of the court was delivered by: Rodriguez, A.A., P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges A.A. Rodriguez, C.L. Miniman and LeWinn.
The opinion of the court was delivered by RODRIGUEZ, A.A., P.J.A.D.
The Estate of Alvina Taylor appeals from the decision of the Tax Court, published at 25 N.J. Tax 398 (Tax 2010), granting the Director, Division of Taxation, summary judgment dismissing the Estate's complaint with prejudice and denying an inheritance tax refund. We affirm.
The operative facts are fully set forth in the Tax Court opinion. We only provide a summary to give a context for our discussion. These facts are not disputed.
Alvina Taylor died November 30, 2002, leaving a gross estate of $675,000. Pursuant to N.J.A.C. 18:26-9, an inheritance tax return was due no later than July 31, 2003. Eight days after the deadline had passed, the Estate made a $75,000 estimated payment of inheritance tax, and filed form ITEP (05-95). This form noted that the amount remitted with the form "was an estimated payment to be applied" towards the inheritance tax, and stated that "any overpayment will be refunded after determination of the actual liability."
On December 3, 2003, the Estate paid an additional $75,000 on account along with a revised form IT-EP (12-99). This revised form does not contain the language concerning refunds being made after determination of actual liability.
On August 6, 2004, the Director requested the overdue inheritance tax returns; the Estate did not comply with this request. The Director made an arbitrary $300,000 plus interest assessment, and demanded the $250,318.53 balance. The Director now concedes that this amount is incorrect because it did not reflect the $75,000 payment made in December 2003. The Notice of Assessment reflected only one credit, a $75,000 payment made on August 11, 2003.
However, the Estate should have been aware upon receipt of the Notice of Assessment that its December 3, 2003 deposit had not been credited. The Estate took no action at that time. Nor did it protest by appealing the assessment to the Tax Court. After the expiration of the period to appeal the $300,000 assessment, the Director filed a Certificate of Debt for $239,053.94. Estate of Taylor, supra, 25 N.J. Tax at 400.
Five years after the return was due, the Estate finally filed an inheritance tax return, which reported a total tax due of $108,092 plus interest, less payments on account. According to the return, this left a balance of $49,873, which was paid with the return.
On January 1, 2009, the Director issued a "Notice of Assessment" with respect to the return, accepting the amounts reported in the estate tax return as accurate. The Director determined that the Estate was entitled to a refund of $90,411.10 When the Estate requested the refund, however, the Director denied the request because "the application for refund was made more than three years from the date that the tax was paid." The Director then issued a final determination stating that the refund claim was untimely pursuant to N.J.S.A. ...