Fleetboston Financial Corporation v. United States

In this case of income tax overpayment and underpayment, the question on appeal is the taxpayer’s obligation to pay interest on underpaid income tax, as later determined by audit, when a tax overpayment for the same tax period and amount was already in the possession of the United States Treasury.

The question is not whether a taxpayer must pay interest to the United States on an underpayment of income tax, for the law is clear that interest is owed on tax underpayments. The question is whether this obligation can be set off against the taxpayer’s overpayment of estimated tax for the same…