- 3 -
$55,302. On their return, petitioners reported zero taxable
income on line 41,2 zero tax on line 55, and an overpayment of
tax of $3,085 on line 71a attributable to withholding. See secs.
1(a)(1), 3(a), (c). Petitioners did not report any items of tax
preference as defined by section 57 on their return.
Petitioners did not report any liability for the AMT on line
43 of their return, and they did not complete or attach to their
return Form 6251, Alternative Minimum Tax--Individuals.
Thereafter, respondent sent petitioners a letter dated April
28, 2003, requesting additional information and stating that
petitioner should file Form 6251. Soon thereafter, petitioners
provided to respondent information expressing their view that
they were not liable for the AMT. Within 4 to 6 weeks,
respondent issued a refund to petitioners.
The following year, respondent commenced an examination of
petitioners’ 2002 return. In connection with the examination,
respondent sent petitioners a 30-day letter dated March 24, 2004,
explaining proposed changes to petitioners’ taxable year 2002
resulting from their liability for the AMT.
Petitioners responded by letter dated April 3, 2004, stating
that the proposed changes were incorrect. In this regard,
petitioners relied on their 2003 letter to respondent, which
stated that they were not liable for the AMT because they did not
2 Mathematically, petitioners’ taxable income is -$2,209.
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