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credit for withholding. See sec. 1.6664-2(g), Example (3),
Income Tax Regs. Accordingly, if a taxpayer overstates the
credit for withholding, the overstatement decreases the amount
shown as the tax by the taxpayer on his return and increases the
underpayment of tax.
Petitioner claimed that he had withholding credits of
$74,596.495 and $26,000 for 1989 and 1990, respectively.
Petitioner attached false Forms W-2, which he prepared, to
substantiate these claims. Petitioner knew that his corporations
did not deposit or withhold, see infra, Federal income taxes on
the wages he earned during 1989 and 1990. Petitioner's
overstatements of withholding resulted in the following
underpayments:
5 Petitioner failed to address the difference between the
amount he claimed as withholding credits on his return
($74,596.49) and the amount he listed as Federal income tax
withheld on his Forms W-2 ($69,600).
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