Robert A. and Nanci M. Spurgin - Page 4




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          Total tax                        $62,602                                    
          Less: estimated tax payments                                                
               Sept. 1993   $30,000                                                   
          Jan.  1994     2,360     -32,360                                            
          Less: deferral of additional                                                
          1993 taxes1                -1,963                                           
          Balance                           28,279                                    
          Plus: estimated tax penalty          111                                    
          Amount owed                       28,390                                    
            1For 1993, taxpayers could elect to defer two-thirds of                   
          their additional 1993 taxes that were due solely to the rate                
          increases reflected in the 1993 tax rate schedules.  Omnibus                
          Budget Reconciliation Act of 1993, Pub. L. 103-66, sec. 13201(d),           
          107 Stat. 459-461.  Petitioners so elected by attaching Form                
          8841, Deferral of Additional 1993 Taxes, to their timely filed              
          return.                                                                     
               Petitioners remitted $500 with their 1993 return, but they             
          made no further payment against their tax liability until August            
          1997.  See infra “E”.                                                       
               By notice dated June 13, 1994, respondent notified                     
          petitioners that they did not qualify for deferral of additional            
          1993 taxes because they had failed to make sufficient payment               
          toward their reported liability.3  Respondent also notified                 
          petitioners that the amount owed was $31,602, determined as                 
          follows:                                                                    
          Tax as reported                 $62,602.00                                  
          Less: Estimated tax payments    -32,360.00                                  
          Payment with return          -500.00                                        
          Unpaid tax                       29,742.00                                  
          Plus: estimated tax penalty       1,224.45                                  
          Late payment penalty          297.42                                        
          Interest                      338.41                                        
          Amount owed                      31,602.28                                  
          Finally, respondent requested that petitioners pay the amount               

               3  In order to qualify for deferral of additional 1993                 
          taxes, a taxpayer was required to pay at least 90 percent of a              
          specified liability.  See Notice 93-51, 1993-2 C.B. 337.                    



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