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In August 2000, petitioners filed Form 1040X, Amended U.S.
Individual Income Tax Return, for 1999 (amended return). As was
the case with their original return, petitioners did not seek
advice or assistance with respect to this amended return. On
line 9 of the amended return, Other taxes, petitioners reported
$6,154.94 as a 10-percent penalty on the Southern Farm Bureau and
Glenbrook distributions, which they referred to in Part II of the
amended return, Explanation of changes to income, deductions and
credits. In addition, petitioners increased their withholding
credit to $69,794.14, to include the taxes withheld on the SFB
and Glenbrook distributions.11 Petitioners did not include the
taxable portion of the SFB and Glenbrook distributions as income
on the amended return. Petitioners calculated and claimed a tax
overpayment of $27,753.13. Respondent refunded the claimed
overpayment with interest (second refund), and the refund was
contributed by petitioner to the SFB nonqualified annuity on or
11 Additionally, on line 1 of the amended return,
petitioners reported partnership income of $1,088 that was not
reported on the original return. Petitioners attached Schedule
K-1, Partner's Share of Income, Credits, Deductions, etc., which
reflected partnership distributions to petitioner during 1999 of
$1,088. The Schedule K-1, however, reflected net income
attributable to petitioner of $476 and interest income of $168.
It is apparent, therefore, that petitioners erroneously reported
$1,088 as partnership income when, instead, petitioners should
have reported net partnership income of $476 and interest income
of $168. A Rule 155 computation will be necessary to correct
this error and to include any self-employment tax that may be due
on such income. See supra note 2.
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