## Facts

- Scott William Katz filed a 2000 federal income tax return as married filing separately.
- He reported adjusted gross income of $46,834.16, itemized deductions of $54,275.81, and personal exemptions of $2,800, resulting in zero taxable income and zero regular tax.
- Katz reported $133.66 of withholding and received a refund for that amount.
- The IRS issued a notice of deficiency for 2000 asserting a $4,214 deficiency consisting entirely of alternative minimum tax (AMT) under I.R.C. § 55.
- The IRS’s only adjustment was allowing $225 of previously unclaimed interest expense; the IRS agreed Katz’s regular tax was zero.
- Using the AMT computation (Form 6251), the IRS added back certain itemized deductions, calculated alternative minimum taxable income (AMTI) of $38,707, applied the married-filing-separately AMT exemption, and computed tentative minimum tax that became Katz’s AMT because regular tax was zero.
- The parties filed cross-motions for summary judgment; Katz did not dispute the IRS’s arithmetic and argued only that Congress did not intend AMT to apply to taxpayers with modest income and legitimate deductions.

## Issues

1. Whether Katz was liable for AMT for tax year 2000 under I.R.C. § 55 when his regular tax was zero and the statutory AMT computation produced a positive tentative minimum tax.
2. Whether summary judgment was proper where the material facts and computations were undisputed and only statutory interpretation was contested.

## Decision

- The court found no genuine dispute of material fact and held the case suitable for summary judgment.
- The court granted the Commissioner’s motion for summary judgment and denied Katz’s motion.
- The court sustained the $4,214 AMT deficiency for tax year 2000.

## Legal Principles

- Summary judgment is appropriate where the record shows no genuine issue of material fact and the dispute can be resolved as a matter of law under Tax Court Rule 121.
- I.R.C. § 55 imposes AMT equal to the excess of tentative minimum tax over regular tax; when regular tax is zero, AMT equals the full tentative minimum tax.
- AMT liability is determined by the statutory computation (including AMTI adjustments, exemptions, and rates), and courts will not create an unwritten exception based on a taxpayer’s income level or general policy arguments about legislative purpose.

## Conclusion

The Tax Court applied the AMT statute according to its text and computation, holding that a taxpayer with zero regular tax may still owe AMT when the § 55 formula yields a positive tentative minimum tax, and that policy-based claims about Congress targeting only high-income taxpayers do not override the statute.


Katz v. Commissioner, T.C. Memo. 2004-97 (2004)