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Respondent determined a deficiency in petitioner’s Federal
income tax for the 2002 taxable year in the amount of $23,277.
Respondent also determined an accuracy-related penalty pursuant
to section 6662(a) in the amount of $1,068. Petitioner does not
dispute the deficiency as determined by respondent.2 Thus, the
sole issue now before the Court is whether petitioner is liable
for the section 6662(a) accuracy-related penalty.
Background
Some of the facts have been stipulated, and the stipulated
facts and accompanying exhibits are hereby incorporated by
reference. At the time he filed his petition, petitioner resided
in Albuquerque, New Mexico.
Petitioner filed, in a timely manner, a Form 1040, U.S.
Individual Income Tax Return, for the 2002 taxable year. For the
2002 taxable year, petitioner received from his employer, Altana,
Inc., two Forms W-2, Wage and Tax Statement, in the amounts of
$103,955.11 and $73.313.30. Petitioner failed to report, on his
Form 1040, $73,310.30 in wages, the amount on one of his Forms W-
2 Although the amount of tax owed is not in dispute, it is
noteworthy that the actual amount of tax owed by petitioner was
$5,337.10, significantly less than the $23,277 deficiency listed
in the notice of deficiency. The difference is attributable to
the fact that withholding from one of petitioner’s Forms W-2,
Wage and Tax Statement, was not initially accounted for by
respondent because petitioner had failed to report the income
from that Form W-2. Respondent accounted for that difference
before determining the accuracy-related penalty in this case. In
any event, the deficiency in this case constitutes a substantial
understatement of income tax.
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Last modified: November 10, 2007