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of $123,797.5 After deducting total payments of $282,821,
petitioners requested a refund of $131,024 and that $28,000 be
applied to their 2001 estimated tax. Petitioners’ 2000 tax
return did not include a Form 6251 or any other calculation of
their alternative minimum tax liability.
In response to a letter from respondent inquiring about the
absence of an alternative minimum tax computation, petitioners
sent respondent a letter on September 15, 2003, and attached a
Form 1040X, Amended U.S. Individual Income Tax Return
(petitioners’ first Form 1040X). On petitioners’ first Form
1040X, petitioners included a Form 6251, determined an
alternative minimum tax liability of $56,827, but reduced their
income by more than $630,000 and claimed a refund of $9,270.
Respondent did not file petitioners’ first Form 1040X.
On May 25, 2004, respondent issued petitioners a notice of
deficiency. Respondent determined a deficiency in petitioners’
2000 Federal income tax of $314,372, based on respondent’s
determination that petitioners were liable for alternative
minimum tax of $314,371.6 Respondent also determined that
5 It is unclear how petitioners calculated the tax on IRAs
and other retirement plans, but $63,717 is apparently
petitioners’ calculation of a 10-percent additional tax under
sec. 72(t).
6 Respondent also increased petitioners’ itemized
deductions by $1 to correct a rounding error made by petitioners.
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