- 3 -
the alternative minimum tax net operating loss deduction.
Petitioner claimed on his U.S. income tax return that the foreign
tax credit and net operating loss deduction completely offset any
U.S. tax liability he may have had for 1992.
Petitioner’s 1992 Federal income tax return was received by
respondent on April 15, 1996. Respondent later reviewed
petitioner’s 1992 return and determined that petitioner had
negligently failed to report that he owed the AMT. Respondent
determined that petitioner owed $12,186 in income tax after the
correct foreign tax credit was applied and a negligence penalty
of $2,437.20 for failing to report and pay his AMT. Respondent
also determined that petitioner owed a late-filing addition of
$3,046.50 because his return was received after the required date
for foreign returns.
OPINION
Nonresident U.S. citizens, such as petitioner, are required
to file Federal income tax returns by a date certain and report
all worldwide income. See sec. 6012; sec. 1.6012-1(a)(1)(i),
Income Tax Regs. If the nonresident citizen pays income tax to
foreign jurisdictions, that citizen is entitled to claim a
foreign tax credit. See secs. 27(a), 901. Petitioner received
U.S.-source income, in the form of dividends and interest, and
German-source income, in the form of a salary from his company
based in Germany. He reported all sources of income on his
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011