- 3 - payments. The payments were to be alimony, included in petitioner’s gross income and deductible by Mr. Gutzler from his gross income. Moreover, in the event that petitioner challenged Mr. Gutzler’s rights to deduct any portion of the monthly payments from his income, she would remain liable to him for the full amount of any increase in his Federal income tax liability. Finally, both parties specifically acknowledged that certain tax consequences might result from the agreement, and that they had been advised to seek independent tax advice regarding these possible tax consequences. On or about April 15, 2003, petitioner filed Form 1040, U.S. Individual Income Tax Return, for 2002, on which she reported both adjusted gross and taxable income of $2,392. On August 16, 2004, respondent issued a notice of deficiency. Respondent’s examination increased petitioner’s reported gross income by $16,800 representing the alimony payments petitioner received from Mr. Gutzler in 2002. Additionally, respondent disallowed petitioner’s previously claimed earned income tax credit of $178. As a result of these changes, respondent calculated a deficiency of $1,599 for petitioner’s 2002 Federal income tax. Discussion 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). Accordingly, petitionerPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011