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overpayment in the amount of $4,543.
In processing petitioner’s 1997 return, respondent
discovered mathematical or clerical errors that served to
understate petitioner’s reported tax liability, and therefore
overstate petitioner’s overpayment claim, by $118. After
correction of these errors, the overpayment claim was reduced to
$4,425.
By notice dated June 1, 1998, respondent advised petitioner
that the overpayment claimed on his 1997 return (corrected as
described above) had been applied to petitioner’s outstanding tax
liability for 1987.
On February 4, 2000, respondent sent petitioner a notice of
deficiency determining a deficiency in his Federal income tax for
1997 in the amount of $1,950. The deficiency was based on
respondent’s determination that petitioner had failed to report
on his 1997 return: (1) Gambling income in the amount of $6,800,
(2) interest income in the amount of $315, and (3) taxable Social
Security benefits in the amount of $5,878.
Shortly after respondent sent the notice of deficiency,
petitioner submitted Form 1040X, Amended U.S. Individual Income
Tax Return, for 1997. In the Form 1040X, petitioner admitted
that he had failed to report the amounts determined by respondent
in the notice of deficiency and that his total income tax
liability for 1997 was $4,451, an amount consistent with
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