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Respondent determined a deficiency of $500 in petitioner’s
2000 Federal income tax. The issue is whether an erroneous
refund issued to petitioner is a gift from respondent.
Petitioner resided in Huber Heights, Ohio, at the time the
petition was filed.
This case was submitted fully stipulated under Rule 122, and
the applicable facts may be summarized as follows.2 In preparing
his 2000 Federal income tax return, petitioner, on line 6c(1) of
Form 1040A, U.S. Individual Income Tax Return, listed “Yancy L.
Young” as his dependent and checked Box 6c(4) showing Yancy as a
qualifying child for the child tax credit. Petitioner, however,
did not claim a child care credit on the return. Respondent
recalculated petitioner’s tax liability to reflect the child tax
credit and refunded $500 to petitioner. Subsequently, respondent
examined petitioner’s return and disallowed the child tax credit
because Yancy was not a qualifying child.
Petitioner concedes that he is not entitled to the child tax
credit.3 Petitioner contends that respondent’s erroneous refund
was a gift to him. While respondent has the authority to make a
2 The facts are not in dispute and the issue is primarily
one of law. Sec. 7491, concerning burden of proof, has no
bearing on this case.
3 A deficiency exists because the erroneously issued
refund is considered a rebate under sec. 6211(a)(2). Laughlin v.
Commissioner, T.C. Memo. 1993-122.
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Last modified: May 25, 2011