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At trial, respondent introduced a Form 4340, Certificate of
Assessments, Payments, and Other Specified Matters, showing the
assessment of tax, interest, and costs for 2002. The Form 4340
indicates that Mr. Hunter made no payments toward the 2002 tax
liability other than $213.16 of withholding credits.
3. The Taxable Year 2002 Deficiency Case
While the above-described events were taking place,
respondent also examined the Hunters’ 2002 tax return. The
Hunters had reported $233,862.08 of gross income consisting of
the following items: (1) $1,953.47 of wages; (2) $18.30 of
taxable interest; (3) $10.06 of ordinary dividends; (4) $100,000
of business income from Mr. Hunter’s sole proprietorship; and
(5) $131,880.25 of capital gain. The Hunters claimed a $3,000
deduction from adjusted gross income for “tuition and fees.” The
Hunters reported $63,427.60 of regular tax and zero AMT. They
also reported $136,137.65 of tax payments for a claimed
overpayment at $72,710.
Respondent determined a $976 deficiency attributable to AMT
and issued a notice of deficiency in October 2004. On a page
labeled “2002 - Personal Exemption Worksheet”, the notice of
deficiency refers to “the total number of exemptions claimed on
Form 1040, line 6e”. The Form 1040, U.S. Individual Income Tax
Return, for 2002 does not contain a line 6e. It does contain,
however, a line 6d for “Total number of exemptions claimed”. The
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