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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, petitioner
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