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an estimated tax “underpayment” penalty because they
substantially overpaid their total required estimated income tax.
Petitioners maintain that the reduction in their claimed refund
was the result of an increase in their regular tax paid (not an
estimated tax penalty or addition to tax), which should, in turn,
decrease their AMT liability.
As we have already discussed, the reduction in petitioners’
refund appears to be the result of an increase in their tax
liability of $67.80, on the basis of assessed mathematical errors
on petitioners’ return, and an assessed addition to tax of
$878.08 for failure to pay estimated income tax. On their
return, petitioners reported their tax liability as $80,557.95.
In the notice of deficiency, respondent listed petitioners’
assessed tax, before adding the AMT, as $80,632. Respondent also
used the $80,632 assessed regular tax in the calculation to
determine an AMT liability of $1,352. The AMT is a tax equal to
the excess of the “tentative minumum tax” for the taxable year
over the “regular tax” for the taxable year. Sec. 55(a).
Although the difference between the amount of regular tax
reported by petitioners and the amount of regular tax assessed by
respondent is slightly more than $67.80,7 we find that respondent
has incorporated the increase in regular tax resulting from
7 The difference is $74.05. We consider this slight
difference to be de minimis.
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Last modified: November 10, 2007