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Pension Plan. In connection with that audit, petitioners'
accountant gave respondent's agent copies of all of petitioners'
original and amended tax returns for taxable years 1984 through
1987.
In determining petitioners' 1985 deficiency, respondent
increased the deficiency by the refund of $65,937. Petitioners
and respondent timely executed several Consent to Extend Time to
Assess Tax (Forms 872) for the taxable years 1987 and 1988,
extending the statute of limitation on assessment for both years.
Discussion
The issue for decision is whether respondent correctly
calculated petitioners' 1985 deficiency. Section 6211(a) defines
the term "deficiency" as the amount by which the tax actually
imposed exceeds--
(1) the sum of
(A) the amount shown as the tax by the
taxpayer upon his return, if a return was made by
the taxpayer and an amount was shown as the tax by
the taxpayer thereon, plus
(B) the amounts previously assessed (or
collected without assessment) as a deficiency,
over--
(2) the amount of rebates, as defined in
subsection (b)(2), made.
Section 6211(b)(2) defines a "rebate" as an abatement, credit,
refund, or other repayment made on the ground that the tax
imposed was less than the amount shown on the return and the
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