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Thus, the parties agreed that the tax liability of Mr. and Mrs.
Hansen was $3,494.05. Of that amount, $2,356.05 had been
assessed against Mr. Hansen after he failed to file a petition
with this Court for review of a notice of deficiency issued to
him with respect to his income tax for 1988. Petitioner had a
withholding credit for 1988 in the amount of $2,960.90, and Mr.
Hansen remitted $1,270.70 in partial payment of the 1988
deficiency assessed against him.
Respondent computes petitioner's available overpayment
credit as follows:
Overpayment credited from 1987 to 1988 $12,886.50
Less frivolous return penalties paid 1,000.00
11,886.50
Add one-half of 1988 withholding 1,481.00
13,367.50
Less Mr. Hansen's deficiency 2,346.05
11,021.45
This computation is erroneous in that it ignores a $10 collection
cost. Furthermore, petitioner should be given credit for the
$1,000 restored to the account. Thus respondent's corrected
computation results in an available overpayment credit of
$12,011.45. To this amount we add the balance of the 1988
withholding credits and subtract the deficiency to be assessed
($1,138), resulting in an overpayment of $12,353.35.
Petitioner contends that there are several discrepancies in
respondent's computation. Petitioner contends that the
overpayment credit from 1987 to 1988 should be $19,136.08 instead
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