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Respondent determined a deficiency of $5,607 in Federal
income tax and the 10-percent additional tax under section 72(t)
for an early distribution from a qualified retirement plan with
respect to petitioners' 1997 tax year. After concessions by the
parties, the sole issue for decision is whether, under section
6402, respondent properly credited a payment by petitioners to
their 1996 tax year instead of 1997 as contended by petitioners.2
Some of the facts were stipulated. Those facts, with the
exhibits annexed thereto, are so found and are made part hereof.
Petitioners' legal residence at the time the petition was filed
was Irving, Texas.
Petitioners' 1997 joint income tax return reflected total
tax payments of $7,500, a tax liability of $3,009, and an
overpayment of $4,491. At trial, respondent conceded that
petitioners had made one additional payment of $582 on their 1997
2 Respondent conceded an unreported interest income
adjustment of $211, an unreported pension and annuity income
adjustment of $97.44, and the 10-percent additional tax under
sec. 72(t). Respondent also conceded petitioners' entitlement to
a trade or business expense deduction of $627 attributable to a
self-employed activity of Mrs. Garcia. Petitioners conceded
their liability for self-employment taxes on the net income from
Mrs. Garcia's trade or business activity, and respondent conceded
petitioners' entitlement to a deduction for one-half of the self-
employment tax under sec. 164(f). Petitioners further conceded
that the Social Security benefits paid to Mr. Garcia during 1997
totaled $11,385 instead of $10,740 reported on their return.
Finally, respondent conceded petitioners' entitlement to an
additional dependency exemption for their daughter, which they
had not claimed on their return.
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Last modified: May 25, 2011