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This omission did not, as petitioners assert, mean that
respondent excluded the $8,000 in estimated tax payments from the
computations. In fact, the notice of deficiency determined that
the reason for the $986 deficiency was due to an increase in
petitioners’ reported taxable income from $79,355 to $83,006, and
accordingly an increase in the amount of tax due from $15,227 to
$16,213.
Second, petitioners claim that despite their error in not
reporting the correct amount of total Social Security benefits
received on line 20a of their 2002 return, because the corrected
figure did not change the amount of the total adjusted gross
income, their income tax liability should not change. Notably,
the parties agree that petitioners’ adjusted gross income for
taxable year 2002 was $98,657.62. The June 16 letter changed the
amount of standard deduction originally claimed by petitioners on
their 2002 return from $7,850 to $9,650, as both petitioners were
over 65 years of age in 2002. This correction, coupled with the
$6,000 exemption, resulted in total taxable income of $83,007.62
and not $84,807, as petitioners maintained at trial.
Accordingly, the amount of tax due on petitioners’ total
taxable income of $83,007.62 was $16,213, with $1,530.25 being
the correct amount of tax owed by petitioners. Since petitioners
remitted $2,016.25 with their completed 2002 return, they would
have been entitled to an overpayment of $486. However, since
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Last modified: May 25, 2011