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Item Petitioner Mr. Capehart Total
Taxable income $14,204 $37,967 $52,171
Erroneous items (14,204) (28,361) (42,565)
Taxable income on -0- 9,606 9,606
Tax on return 1,444 1,444
Tax deficiency 2,745 5,480 8,225
Total tax liability 2,745 6,924 9,669
Withholding (2,164) (4,968) (7,132)
Unpaid tax 581 1,956 2,537
Treating the withholding tax paid in excess of the liability
as a tax collected without assessment for purposes of section
6662, the underpayment of tax is allocated between petitioner and
Mr. Capehart as follows:
Item Petitioner Mr. Capehart Total
Tax imposed $2,745 $6,924 $9,669
Tax on return -0- (1,444) (1,444)
Tax collected without
assessment (2,164) (3,524) (5,688)
Underpayment 581 1,956 2,537
We reach the same result by applying respondent’s method of
computing the underpayment without allocating any portion of the
$1,444 of tax reported on the return to petitioner, shown as
follows:
Petitioner’s withholding $2,164
Petitioner’s allocable share of the
$1,444 liability report on the return -0-
Petitioner’s frozen refund credit 2,164
Petitioner’s share of deficiency 2,745
Petitioner’s frozen refund credit (2,164)
Petitioner’s underpayment upon which
the accuracy-related penalty applies 581
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