- 6 -
1998 return totaling $315,587. Petitioners agreed to those
adjustments but consented only to an assessment of additional tax
of $23,360, based on the same income-averaging amounts on
Schedule J of the original return, without any adjustment for the
NOLs for 1995 and 1996 that had been carried back to earlier
years. Respondent did not agree or consent to that computation
method using the negative income amounts of the 1995 and 1996
base years.
Likewise, petitioner's 1999 income tax return was examined
by the IRS, and petitioner agreed to an assessment of additional
tax on income adjustments totaling $71,847. Petitioner's consent
to this assessment was also based on income averaging and
utilization of the same NOL for 1996 without any adjustment for
the carryback of the 1996 NOL to 1993. Respondent likewise did
not agree or consent to this computation method. See supra note
3.
The second issue is petitioners' disagreement over
respondent's computation of the alternative minimum tax of $4,545
for 1998 under section 55.7 Petitioner contends that where the
7 As noted earlier, petitioner agreed to an AMT
assessment of $30,087 for 1998 pursuant to agreed income
adjustments but on a computation of tax under sec. 1301 without
any adjustments to the negative taxable income for 2 of the base
years in the income-averaging computation. The $4,545 AMT
determination for 1998 is based on the same income adjustments
agreed to by petitioner but with a tax computed under sec. 1301
(continued...)
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