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“deficiency.” But section 6211(a) does, as the “amount by which
the tax imposed * * * exceeds * * * the amount shown as the tax
by the taxpayer upon his return.” Section 6015(b)--the section
requiring there to be an “understatement”--incorporates section
6662(d)(2)(A)’s definition of “understatement” as “the excess of-
-(i) the amount of tax required to be shown on the return for the
taxable year, over (ii) the amount of the tax imposed which is
shown on the return.” Sec. 6662(d)(2)(A).
Whether there is an “understatement” or “deficiency” thus
turns on what tax is “shown” on a return with an error like the
one on the Parkers’ 1996 Form 1040. Is the “tax shown” the
amount that the Parkers entered on line 51 as their “total tax,”
or is it the amount entered in the IRS’s records after the
“purple pencil people” noticed that the Parkers’ income tax and
self-employment tax, though both shown on the return, had not
been added? The Commissioner argues that the tax “shown on the
return” was all the tax shown on any line of the return even if
not totaled up at the end. If he’s right, there is no deficiency
(and no understatement either) because the tax imposed and the
tax shown on the return are equal, which makes the difference
between the two zero. Ms. Goode-Parker disagrees. She contends
that her husband’s mistake created both an understatement and a
deficiency because his mistake was a “mathematical error.”
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Last modified: May 25, 2011