Simon L. and Patricia M. Richard - Page 5

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          made an additional tax assessment of $6,500 (bringing the total             
          assessment to the $14,152 petitioners reported as due on the                
          amended return) and allowed an additional withholding credit to             
          conform those credits to the amount petitioners reported.                   
          Petitioners did not pay the entire tax reported as due on the               
          amended return, and there was an outstanding liability for 1993             
          after respondent made the assessments just described.4                      
               In 1998, petitioners entered into an installment agreement             
          with respondent to satisfy their 1993 tax liability (1993                   
          installment agreement).  Petitioners made periodic payments                 
          totaling $2,617 pursuant to the 1993 installment agreement from             
          July 1998 to April 1999.  However, respondent applied $2,219.76             
          of these payments to the 1991 quick assessment and the $397.24              
          balance to a 1992 assessment.                                               
               Petitioners received an extension to June 15, 1995, for                
          filing their return for 1994 and on June 20, 1995, filed a joint            
          Federal income tax return for 1994 reporting a tax due of $4,114.           
          After withholding credits of $3,923, petitioners had a balance              
          due of $191.  They submitted a payment of $195.84 on August 21,             
          1995, which satisfied all outstanding assessments for 1994.                 



               4 Respondent also abated the addition to tax for failure to            
          pay estimated tax and partially abated the late filing addition             
          to tax and interest to bring the assessments into conformity with           
          the amounts petitioners reported on the amended return.                     





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