Walter A. and Alfreda Kocot - Page 6

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               Petitioners sent numerous letters contesting respondent’s              
          proposed changes and asserting that respondent had acted                    
          negligently in making the determinations.  Specifically,                    
          petitioners disagreed with the proposed change provided in the              
          June 14 letter, and on September 30, 2004 (after the issuance of            
          the notice of deficiency), notified respondent of their                     
          disagreement including, inter alia, a Social Security benefits              
          worksheet, which they prepared, that showed $24,329 as the                  
          taxable Social Security benefits received in 2002.  This amount--           
          $24,329--is the same amount listed on the notice of deficiency.             
               The Commissioner’s determinations are presumed correct, and            
          taxpayers generally bear the burden of proving otherwise.  Welch            
          v. Helvering, 290 U.S. 111, 115 (1933).  In this case,                      
          petitioners do not deny their error in reporting $24,329 on both            
          lines 20a and 20b on their 2002 return.  In fact, before trial,             
          petitioners paid both the $986 amount in deficiency as well as              
          $56.68 in interest assessed by respondent.  Petitioners argue               
          that they are entitled to $1,045.68 as an overpayment of taxes              
          ($986) and interest ($59.68) because:  (1) Respondent failed to             
          account for $8,000 in estimated payments made by petitioners                
          towards their 2002 income tax liability; (2) despite petitioners’           
          admitted errors on their 2002 return, the amount of their                   

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