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Thus, respondent’s denial of relief was based in part on his
determination that approximately 37 percent of the underpayment
was attributable to petitioner. As discussed below, respondent’s
conclusion concerning petitioner’s share of the unpaid liability
was arbitrary and without sound basis in fact.
The determination letter contains no explanation of the
computation underlying the conclusion that petitioner’s share of
the underpayment was 37 percent. It is likewise silent regarding
the issue of petitioner’s entitlement to claim exemptions for
dependents. In his posttrial brief, respondent takes the
position that the determination letter’s calculation of
petitioner’s share of the unpaid tax liability was based upon a
computation of his tax liability as if he had filed for 1994
using a status of married filing separately. According to
respondent, petitioner’s hypothetical tax liability for 1994 so
computed would have been $4,327, which, after reduction for his
$2,696 withholdings, would have left an unpaid liability of
$1,631--or approximately 40 percent of the actual unpaid
liability ($4,062) for 1994.8
Respondent’s comparison of petitioner’s hypothetical
liability as a married-filing-separately taxpayer, as reduced by
his actual withholdings, to the actual unpaid liability on his
8 Respondent offers no explanation for the discrepancy
between his 40-percent computation on brief and the revenue
agent’s 37-percent computation in the determination letter.
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