Klaassen v. Commissioner

The Klaassens (plaintiffs), a couple with ten children and adjusted gross income of $83,056.42, claimed deductions for state and local taxes, medical expenses, and 12 personal exemptions on their federal return, resulting in $5,111.00 in reported tax liability; the IRS (defendant) audited them and determined they owed an additional $1,085.43 in alternative minimum tax (AMT). The Klaassens did not dispute the IRS's calculation, only its application, arguing the AMT was meant to apply only to wealthy taxpayers claiming tax preference items; the Tax Court upheld the IRS's interpretation, and the Klaassens appealed.