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Respondent determined a deficiency of $2,426 in petitioners'
1998 Federal income tax.
The issues for decision are: (1) Whether respondent is
barred or precluded from making an assessment against petitioners
for an erroneous refund, and (2) if respondent is not so barred,
whether petitioners are entitled to an abatement of the interest
on the deficiency under section 6404(e)(2).
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. Petitioners' legal residence at the time the petition
was filed was Suisun, California.
Petitioners filed a timely joint Federal income tax return
for 1998. Attached to their return were three Internal Revenue
Service (IRS) Forms W-2, Wage and Tax Statement, for salaries and
wages earned by petitioners during 1998 that totaled $33,391.85.
In addition, third-party payers reported to the IRS through
information returns income payments to petitioners during 1998
totaling $198 for interest and dividends.
On their Federal income tax return for 1998, petitioners did
not report the $198 dividend and interest income. On line 7 of
the return, for wages and salaries, petitioners reported $3,340
in wage and salary income rather than the $33,391.85 shown on the
IRS Forms W-2 they had received. However, on page 2 of their
return, petitioners reported $33,400 in income, which
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