J. Michael and Susan Reimer - Page 16




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                                                     Federal Income                   
                       Year          W-2 Income      Taxes Withheld                   
                       1992           $70,015          $98.96                         
                       1993           70,621           48.63                          
                       1994           84,555           2,702.03                       
                       1995           94,697           5,034.71                       
                       1996           92,865           5,920.28                       
                       1997           70,054           3,502.74                       
                       1998           87,380           4,369.16                       
                      Total           $570,187         $21,676.51                     
               In 1993, Mr. Reimer claimed 26 exemptions on Form W-4,                 
          Employee’s Withholding Allowance Certificate.  In 1995, Mr.                 
          Reimer also requested his employer, Village Pontiac, to apply a             
          flat 10-percent Federal and flat 2-percent Illinois income tax              
          rate for payroll purposes.  In 1996, Mr. Reimer requested his               
          employer, Village Pontiac, to apply a flat 5-percent Federal and            
          flat 1-percent Illinois income tax rate for payroll purposes.               
          J.   Petitioners’ Federal Income Tax Returns and Notice of                  
          Deficiency                                                                  
               Petitioners timely filed their 1993 Federal income tax                 
          return.  Petitioners filed and were granted automatic extensions            
          of time to file their 1994 and 1995 Federal income tax returns.             
          Their 1994 and 1995 returns were received by respondent on August           
          21, 1995, and August 23, 1996, respectively.  The postmark on the           
          envelope containing the 1994 return was stamped August 15, 1995.            







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