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On June 16, 2003, responding to petitioners’ reporting the
same amount--$24,328.70--on both lines 20a and 20b of their 2002
return, respondent sent petitioners a proposed change letter
(June 16 letter) that reduced line 20b of petitioners’ 2002
return to $20,678. Respondent reduced the amount reported by
petitioners on line 20a of their return ($24,328.70) by 15
percent to accurately reflect the taxable portion thereof
($20,678). The June 16 letter also corrected the amount claimed
by petitioners as their standard deduction (line 38) from $7,850
to $9,650, since both petitioners were over 65 years of age in
2002. The 15-percent reduction to the reported amount on line
20a ($24,3291), and the increase in petitioners’ standard
deduction ($9,650), resulted in petitioners’ receipt of a refund
for taxable year 2002 in the amount of $1,472.81.
After sending the June 16 letter, respondent received
information from the Social Security Administration indicating
that petitioners’ total Social Security benefits received for
taxable year 2002 were actually $28,622 and not $24,320.70, as
petitioners originally reported on line 20a of their 2002 return.
Subsequently, on April 5, 2004, respondent sent a second proposed
change letter (April 5 letter), which increased petitioners’
taxable Social Security benefits received from $20,678 to
$24,329.
1 Rounded to the nearest dollar.
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Last modified: May 25, 2011