T.C. Summary Opinion 2004-121
UNITED STATES TAX COURT
IVAN N. ERDELYI AND LYDIA ERDELYI, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13595-03S. Filed September 2, 2004.
Ivan N. Erdelyi, pro se.
James N. Beyer, for respondent.
POWELL, Special Trial Judge: This case was heard pursuant
to the provisions of section 74631 of the Internal Revenue Code
in effect at the time the petition was filed. The decision to be
entered is not reviewable by any other court, and this opinion
should not be cited as authority.
1
Unless otherwise indicated, subsequent section references are
to the Internal Revenue Code in effect for the year in issue.
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Respondent determined a deficiency of $1,341 in petitioners’
2000 Federal income tax. The issue is whether petitioners are
liable for an alternative minimum tax. Petitioners resided in
Glenside, Pennsylvania, at the time they filed the petition.
The facts may be summarized as follows. Petitioners timely
filed their 2000 Federal income tax return reporting a total tax
liability of $32,335.55. The return showed tax payments of
$32,129.12 and a balance due of $206.43, which presumably was
remitted when the return was filed. The computation of the tax
reported included what respondent determined was a mathematical
error of $119.01 in petitioners’ favor, reducing petitioners’
total tax liability to $32,216.54. The computation of that
liability did not include the so-called alternative minimum tax
(AMT). See sec. 55. Respondent informed petitioners that they
were liable for the AMT. Petitioners filed a Form 6251,
Alternative Minimum Tax--Individuals, on which they reported (and
paid) an additional liability of $1,222. Subsequently,
respondent sent petitioners a Notice CP12, 2000 Tax Statement,
and mistakenly issued a refund check to petitioners of $1,341.01,
which is the sum of the mathematical error ($119.01) and the AMT
($1,222) amounts. In the accompanying correspondence there was
no specific identification of the erroneous items giving rise to
the refund. The statement showed that petitioners’ total tax
payments for the 2000 year were $33,557.55, which is the total of
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the tax liability shown on petitioners’ return ($32,335.55) and
the AMT liability ($1,222). Petitioners negotiated the refund
check. Subsequently, respondent issued a notice of deficiency to
petitioners determining a deficiency of $1,341 that reflects an
AMT liability of $1,341. In correspondence between petitioners
and respondent, respondent explained that while respondent
received the AMT payment of $1,222, petitioners also received a
refund of $1,341, and they were still liable for the AMT.
Petitioners concede for the taxable year 2000 they had an
AMT liability of $1,222.2 As we understand, however, they
contend that they paid that liability, and, therefore, respondent
is precluded from determining the AMT in the notice of
deficiency. As we further understand, the factual predicate for
this argument is that the correspondence accompanying the refund
check makes no reference to the AMT and the refund may have been
due to other unknown adjustments. Petitioners do not point to
any other adjustments that could have produced the refund.
Moreover, we note that the amount of the refund is the exact
amount of the mathematical error and the AMT liability. In sum,
this position is disingenuous.
Nonetheless, it does appear that an adjustment should be
made. Respondent determined a deficiency of $1,341. That amount
appears to include the mathematical error respondent determined
2
Petitioners do not satisfy the requirements of sec. 7491(a).
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in petitioners’ favor that respondent does not dispute and for
which petitioners should be given credit. The deficiency,
therefore, should be the amount of the AMT liability or $1,222.
Reviewed and adopted as the report of the Small Tax Case
Division.
Decision will be entered
for respondent in the amount
of $1,222.