- 4 - the letter erroneously determined the amount of the tax to be $9,202, by applying the tax rate schedule for "head of household", as opposed to petitioner's tax liability as determined in the statutory notice which used the "single" tax rate schedule. Petitioner stipulated that he received the unreported amounts of income determined by respondent. Respondent concedes that petitioner is entitled to the additional Schedule A gambling loss deduction in the amount of $126 allowed in the April 9, 1997, letter. Respondent maintains, however, that petitioner's proper filing status is single and that as a result of the increased gambling loss deduction the amount of the "revised deficiency" is $3,906, based on a Federal income tax liability for 1994 in the amount of $10,210.3 The first issue for decision is whether respondent is bound by the report issued on April 9, 1997. Petitioner argues that the Court should hold that he is liable only for the tax liability determined in the report. He contends that the report constitutes a contract between himself and respondent. We disagree. It is well established that as a general rule the Commissioner is finally and conclusively bound by an agreement with a taxpayer only if the parties enter into a closing 3 This amount does not take into account respondent's forthcoming adjustment to the taxable amount of the annuity payments received by petitioner during 1994. See supra note 2.Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011