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return. The $9,606 of taxable income reported on the return upon
which the tax reported on the return was calculated was Mr.
Capehart’s income that was not offset by the erroneous items
allocated to him. We conclude, therefore, that the $1,444 tax
reported on the return should not be included in computing the
portion of the underpayment attributable to petitioner.
Any portion of the tax shown on the return that is allocated
to petitioner reduces the amount of her withholding credits to be
applied toward her portion of the tax deficiency and increases
her share of the underpayment. Consequently, allocating a
portion of the tax shown on the return to petitioner increases
her portion of the accuracy-related penalty. Taking into account
the proper allocation of the erroneous items, we do not think
that it is proper to allocate any of the tax shown on the return
to petitioner.
On the basis of the taxable income and erroneous items, the
total tax liability and the portion not offset by withholding
credits (unpaid taxes) is allocated between petitioner and Mr.
Capehart as follows:
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