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be $11,767, as indicated by a calculator tape attached to her
return.
The $16,204 reported as “wages, salaries, tips, etc.” on
petitioner’s 1990 return is the sum of the wages reported on the
Forms W-2 listed above, plus petitioner’s estimate of her
earnings from the law firm. Taking into account unchallenged
deductions, her 1990 return lists her Federal income tax
liability as $1,639. Federal income tax withholdings of $449 are
applied against this liability resulting in a Federal income tax
of $1,190 to be paid with her return. No income tax payment,
however, was submitted with petitioner’s return. Statements
contained in a letter attached to petitioner’s 1990 return
suggest that petitioner might have been experiencing financial
difficulties at the time her 1990 return was filed.
On May 20, 1991, respondent assessed the income tax
liability of $1,639 reported on petitioner’s 1990 return, plus a
late payment penalty of $11.90, and interest of $11.47. The late
payment penalty and interest take into account the Federal income
tax withholdings reported on petitioner’s return.
As it turned out, petitioner underestimated and
underreported her 1990 earnings from the law firm. On November
27, 1992, respondent, reacting to information received from the
law firm, sent petitioner a notice of proposed changes to her
1990 return. In that notice, respondent proposed to increase
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