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notice is not directly appealable to the Tax Court. However, a
taxpayer may request an abatement of the increased liability
within 60 days, which the Commissioner must grant. If the
Commissioner still thinks he was right, he must send a notice of
deficiency to the taxpayer. The normal rules for petitioning
this Court for redetermination of that deficiency then kick in.
See sec. 6213(b)(2).
Instead of demanding an abatement and waiting for a notice
of deficiency, the Holloways posted a cash bond and then
submitted a written protest requesting a review of the math error
notice.4 While reviewing the protest, the Commissioner looked
into the Holloways’ adoption credit. Discovering that the
Holloways were claiming the credit for Danny Holloway’s expenses
in adopting his stepchildren--a use specifically disallowed by
section 23(d)(1)(C)--the Commissioner sent the Holloways a notice
3(...continued)
there was a “mathematical or clerical error” on a tax return.
See sec. 6213(b)(1), (g)(2). The Code’s definition of what
counts as a math error includes errors in calculating statutory
limits on the kind of credits that the Holloways claimed. See
sec. 6213(g)(2)(E).
4 If a taxpayer disagrees with the Commissioner’s proposed
tax liability but wants to prevent interest from accruing, he may
remit all or a portion of the proposed liability (plus interest
due) as a deposit in the nature of a cash bond rather than a
payment. Rev. Proc. 84-58, 1984-2 C.B. 501. Such a deposit
doesn’t earn interest, isn’t subject to a claim for credit or
refund as an overpayment, and must be returned to the taxpayer on
request at any time before assessment. Id. sec. 4.02(1), 1984-2
C.B. at 502.
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Last modified: May 25, 2011