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credit of $474 was claimed. The Form W-2 attached to the 1988
return reflects $2,000 paid to Mr. Zimmerman by Staff Leasing,
Inc. On their Form 1040 for 1989, the only income item reported
was $808.37 in net Schedule C business income; an earned income
credit of $114 was claimed. Petitioner signed the returns but
claims that she did not look at the returns when she signed them.
After examination of the returns, respondent increased the
Zimmermans' income as follows:
Item Taxable Year 1988 Taxable Year 1989
Wages $12,609 $2,799
Interest income 115 160
Dividend income 31 ---
Schedule C income 27,613 8,273
Schedule C expenses 11,125 43,980
Totals $51,493 $55,212
Respondent increased self-employment tax by $5,223 and $6,250,
and disallowed (recaptured) the earned income credit of $474 and
$114, for 1988 and 1989, respectively.
The omitted wages, interest income, and dividend income are
items attributable to petitioner; the increases in Schedule C
income and the disallowance of portions of the Schedule C
expenses are items attributable to Mr. Zimmerman. Petitioner
concedes that she failed to report her W-2 wages from Martin
Marietta, her dividends, and her interest income in the amounts
as determined by respondent. Petitioner seeks to be relieved of
liability as an innocent spouse as to the Schedule C items
attributable to Mr. Zimmerman.
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