- 9 - “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.”Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011