Donald R. Cooley and Cathy A. Cooley - Page 25

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         taxable year of $3,126.40.  Petitioners also allege that a $2,564            
         refund was due for their 2001 taxable year, and that respondent              
         applied that refund against the deficiencies in the instant case.            
         Petitioners further allege that respondent notified them in a                
         letter, dated March 28, 2002, that a $4,215 overpayment had been             
         applied against the deficiencies in their 1991, 1992, and 1993               
         taxable years.                                                               
              Respondent’s notice of determination indicated that the                 
         liabilities shown on the final notice of intent to levy for                  
         petitioners’ 1992 taxable year were based on their tax returns.              
         Respondent’s final notice of intent to levy showed that                      
         petitioners’ liabilities for their 1992 taxable year totaled                 
         $2,365.11, which reflects an assessed balance of $1,968.42 and               
         statutory additions of $396.69.  The Appeals officer’s supporting            
         statement and the notice of determination indicate that those                
         liabilities consisted of interest that had accrued on taxes                  
         reported on petitioners’ original and amended returns.  The                  
         Appeals officer also indicated that “Generally, the taxpayer full            
         [sic] paid the tax but has not paid the interest.”  Petitioners              
         reported a tax liability of $42,714.42 on their final amended                
         1992 tax return, and petitioners have paid at least that amount              
         for their 1992 taxable year.  However, the April 4, 2000 notice              
         of deficiency indicates that the income tax for petitioners’ 1992            
         taxable year was $39,498.02.  Respondent did not determine a                 
         deficiency in income tax for that year.                                      





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