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Petitioners’ Turbotax-generated Federal return contained an
$8,448 deduction of a charitable contribution carryover on line
17 of Schedule A, Itemized Deductions, labeled “Gifts to Charity”
“Carryover from prior year”. Petitioners were not entitled to
deduct an $8,448 charitable contribution carryover from prior
years. Petitioners believe that the $8,448 on line 17 was caused
by faulty software in the Turbotax product. Approximately 2
years after petitioners’ 2001 return was filed, on May 13, 2004,
respondent sent a letter to petitioners notifying them of a 2001
income tax examination solely involving their claimed “Gifts to
Charity.” In that same letter, respondent advised of the
intention to disallow their deduction of an “amount you claimed
on Line 17 of Schedule A as a carryover contribution from a prior
year.”
Subsequently, respondent, in a July 7, 2004, letter,
provided petitioners with an examination report (30-day letter)
explaining the proposed changes to petitioners’ 2001 return. The
first page of the July 7, 2004, transmittal letter advised
petitioners that they owed income tax in the amount of $1,153.23.
On Form 4549, Income Tax Examination Changes, however, the amount
of tax due was shown as $2,327.40. On two other pages of the 30-
day letter, the tax due was also shown as $2,327.40, along with
interest computed to August 6, 2004, of $201.37, for total tax
and interest of $2,528.77.
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Last modified: May 25, 2011