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Respondent determined petitioners had a $3,123.50 Federal
income tax deficiency for 1998, attributable primarily to the
alternative minimum tax (AMT) under section 55(a). Following
petitioners’ concession of the non-AMT issues, the issues for
decision are whether petitioners are liable for the AMT for 1998
and whether petitioners are relieved of that liability by a “no
change” letter they received from respondent.
Issue l. Alternative Minimum Tax
Petitioners timely filed their 1998 Federal joint income tax
return and reported adjusted gross income of $82,234. On
Schedule A, Itemized Deductions, petitioners claimed total
itemized deductions of $28,839. The bulk of these deductions--
$24,505--was attributable to miscellaneous itemized deductions--
$21,055 (unreimbursed expenses incurred and paid by petitioner
wife in earning employee wage income as an “educational
consultant”)--and deductions for State and local taxes-–$3,450.
Subtracting the total itemized deductions, petitioners’ reported
tax table income was $53,395. After further deduction for
personal exemptions of $16,200, petitioners’ taxable income for
the 1998 taxable year was $37,195. On that amount of taxable
income, petitioners reported regular income tax liability (before
credits) of $5,576 (after credits $2,576). Petitioners did not
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