Ester A. D'Avilar - Page 4

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          that also shows $942.31 of Federal income tax withholdings; (2)             
          prepared Federal income tax returns for other individuals; and              
          (3) made cash contributions totaling $1,315 to the Brooklyn                 
          Tabernacle Deliverance Center.                                              
               Petitioner’s timely filed 2000 Federal income tax return               
          shows her name as the “paid preparer” and “Marcy Multiservice               
          Center” as the name of the firm of the paid preparer.  On that              
          return petitioner:  (1) Reported wage income of $12,360; (2)                
          claimed exemption deductions for herself and three dependents;              
          (3) claimed the standard deduction; and (4) claimed an earned               
          income credit computed by treating each of two dependents as a              
          qualifying child.  Petitioner did not elect to itemize deductions           
          on her 2000 return, and she did not include a Schedule C, Profit            
          and Loss from Business, with that return.  Her return shows no              
          taxable income and no income tax liability.  The $4,157 refund              
          claimed on petitioner’s return consists of $1,245 of Federal                
          income tax withholdings from her wages and a $2,912 earned income           
          credit.  Attached to petitioner’s return is a Form W-2 from the             
          City of New York that reports the wages and income tax                      
          withholdings shown on petitioner’s return.1                                 
               In the notice of deficiency respondent increased                       
          petitioner’s income by $11,286, which is the difference between             

               1 No explanation has been provided for the discrepancies               
          between the Forms W-2 contained in the record.                              





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