Scott Thomas and Jennifer Gundry - Page 4




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          approximated the $33,391.85 in wage and salary income.  The                 
          difference of $8.15 was not explained at trial.  Petitioners                
          calculated the tax on their return based on income of $33,400.              
          After allowing for deductions and exemptions, their tax liability           
          was $2,704.  Petitioners had prepaid $140 through taxes withheld            
          on their wages, and, thus, their return showed a balance due of             
          $2,564.  Petitioners paid this amount.  Sometime thereafter,                
          petitioners received from respondent a check for the refund of              
          taxes in the amount of $2,426.  At trial, counsel for respondent            
          advised the Court that the $2,426 refund was based on                       
          respondent's erroneous reliance on the wage income amount of                
          $3,340 that was shown on line 7 of petitioners' return, and,                
          based on such income amount, petitioners had overpaid their                 
          taxes, for which a refund for overpayment was made to                       
          petitioners.  Respondent thereafter issued the notice of                    
          deficiency, upon which this case is based, to rectify the obvious           
          error by respondent and determined a deficiency based on                    
          petitioners' correct wage income plus the interest and dividend             
          income petitioners failed to report on their return.2                       



               2    The notice of deficiency is based on $31,253 in wage              
          income.  Counsel for respondent at trial agreed that this amount            
          excludes wage income earned by petitioner Jennifer Gundry in the            
          amount of $2,138.67, which respondent inadvertently failed to               
          include in the notice of deficiency.  Respondent did not file an            
          answer to assert an increased deficiency for this omitted income            
          and conceded that amount at trial.                                          





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