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Respondent determined deficiencies of $20,993 and $21,898 in
petitioners' Federal income taxes, respectively, for 1998 and
1999 and corresponding penalties under section 6662(a) in the
amounts of $4,199 and $4,380.
Some of the facts were stipulated, and those facts, with the
annexed exhibits, are so found and are incorporated herein by
reference. At the time the petition was filed, petitioners'
legal residence was Rio Rancho, New Mexico.
The issues for decision are: (1) Whether petitioners are
entitled to disallowed itemized deductions for charitable
contributions, job expenses, and other miscellaneous deductions,
and (2) whether petitioners are liable for the penalties under
section 6662(a).
For each of the years in question, petitioners claimed
itemized deductions on a Schedule A, Itemized Deductions, of
their Federal income tax returns. For 1998, petitioners claimed
itemized deductions totaling $36,703, of which $20,895 was
disallowed by respondent. For 1999, petitioners deducted
$43,948, of which $19,800 was disallowed by respondent.
Petitioners, nevertheless, were allowed itemized deductions for
both years, since the total of their other claimed and allowed
deductions exceeded the standard deduction under section 63(c).
For the 2 years at issue, the disallowed deductions consisted of
charitable contributions, job expenses, and other miscellaneous
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