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Table 13 sets forth petitioner’s and Betsy’s 1983 adjusted
gross income, taxable income, and income tax liability as (1)
shown on their 1983 tax return, (2) adjusted by respondent in
1987, and (3) determined in the notice of deficiency in the
instant cases.
Table 13
1987
Audit--Revenue Notice of
Tax Return Agent’s Report Deficiency1
Adjusted gross income $407,347 2
2
Taxable income 354,112 $284,227 $309,497
Income tax liability 160,344 125,402 138,142
1 These amounts are as shown in the notice of deficiency, and do
not take into account respondent’s later concessions. See supra
note 2.
2 Adjusted gross income is not shown on the indicated documents.
Respondent audited petitioner’s and Betsy’s 1985 joint tax
return sometime before February 1987, and concluded that
petitioner and Betsy had overstated their income for that year by
$18,033; this overstatement resulted in a $9,016 overstatement of
petitioner’s and Betsy’s 1985 tax liability. The resulting Form
4549 (Income Tax Examination Changes) for 1985 shows that
petitioner and Betsy were entitled to a $8,333 increase in
deduction for “Rental Expenses” and a $9,700 increase in
deduction for “Contributions”. Apparently, petitioner and Betsy
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