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income of $244,190 rather than the $20,243,699 initially
reported. Other than wage income, the 2000 amended return
reported the same income and deductions as initially reported,
resulting in regular taxable income of $3,997,850. The 2000
amended return reported a reduced regular tax of $852,586, AMT of
zero, self-employment tax of $429, and after deducting the same
foreign tax credit and total payments as initially reported,
claimed a refund of $4,815,148. The 2000 amended return was not
accepted by the Internal Revenue Service.
On April 15, 2003, petitioner filed a separate Form 1040X
for 2000 containing the following statement:
The taxpayer’s original return erroneously reported an
amount due based on an incorrect valuation and/or
inclusion of stock options (both qualified and non
qualified) and the incorrect application of the AMT net
operating loss and AMT credit. A list of the legal
grounds supporting the amended return’s valuation of
stock options and/or exclusion of such options from
income along with the correct application of the AMT
net operating loss and AMT credit is attached to this
form. The application of the attached legal arguments
to the taxpayer’s stock option transactions will result
in a change in the amount due for lines 1, 5 through
10, and 19 through 24 on the front of this 1040X form.
The exact amount of the refund will be determined
pending the final determination of facts and the
release of a technical advice memo or court decision.
4(...continued)
rules or regulations or to a substantial understatement of income
tax for non-tax-shelter items if the return position has a
reasonable basis.
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Last modified: May 25, 2011