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self-employment tax was $6,154; i.e., 15.3 percent of his net
earnings from self-employment ($40,225 x 0.153), rather than
$1,665 as he reported on the 2000 return.
Petitioner’s correct tax liability for 2000 is $11,891,
computed as follows:
Business income (Schedule C) $43,558
Total IRA distributions 400
Total income 43,958
IRA deduction $1,000
One-half self-employment tax 3,077
4,077
Adjusted gross income 39,881
Standard deduction 4,400
Exemption 2,800
7,200
Taxable income 32,681
Tax on taxable income $5,737
Self-employment tax 6,154
Total tax 11,891
Petitioner understated his 2000 tax liability by $4,453
($11,891 - $7,438). That understatement is attributable to
mathematical and clerical errors, and respondent was not required
to issue a notice of deficiency. Respondent did not assess tax
greater than the amount properly computed on the income
petitioner reported on his return or greater than that
attributable to petitioner’s mathematical and clerical errors.
To the contrary, respondent made an error in the calculation of
petitioner’s self-employment tax and consequently assessed
petitioner $800 less than he actually owed. Therefore,
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