86 T.C. 929">*929 Respondent determined a deficiency in petitioners' 1980 Federal income taxes in the amount of $ 1,865.25. The sole issue involves the proper figure to be used as "regular tax" in determining whether or not petitioners are liable for the alternative minimum tax under section 55. ¹

FINDINGS OF FACT

This case was submitted fully stipulated. The stipulation of facts and the exhibits attached thereto are incorporated herein by this reference.

Petitioners, husband and wife, resided in Winston-Salem, North Carolina, at the time they filed their petition in this case. They timely 1986 U.S. Tax Ct. LEXIS 111">*116 filed their joint 1980 Federal income tax return (Form 1040) with the Internal Revenue Service Center in Memphis, Tennessee.

On their 1980 return, petitioners reported adjusted gross income in the amount of $ 57,956 and income tax (after a political contributions credit) in the amount of $ 10,348. Petitioners qualified for income averaging and properly computed their 1980 income tax using the income averaging 86 T.C. 929">*930 provisions of sections 1301-1305, to arrive at that tax figure of $ 10,348. On their Schedule D, Capital Gains and Losses, attached to their 1980 return, petitioners reported the following amounts:

Thus, $ 38,140 of petitioners' 1980 adjusted gross income of $ 57,956 was from long-term capital gain. With their return as filed, petitioners did not submit a Form 6251, Alternative Minimum Tax Computation.

In response to correspondence from the Memphis Service Center, petitioners, on August 11, 1981, mailed an Alternative Minimum Tax Computation (Form 6251) for 1980. On the Form 6251, petitioners correctly reported "alternative1986 U.S. Tax Ct. LEXIS 111">*117 minimum taxable income" ² in the amount of $ 100,853. Petitioners correctly calculated their tax under section 55(a)(1) (commonly referred to as the "tentative alternative minimum tax") in the amount of $ 12,213. However, on line 19 of the form, petitioners reported $ 13,329 as their "regular tax," ³ rather than the $ 10,348 shown on their Form 1040. A footnote to this $ 13,329 figure describes it as "tax before income averaging." This amount was calculated under section 1 without using the income averaging provisions of sections 1301-1305. Consequently, petitioners reported no alternative minimum tax due, since such "regular tax" figure of $ 13,329 was higher than the tentative alternative minimum tax of $ 12,213.

On September 28, 1981, the Memphis Service Center recomputed petitioners' 1980 alternative minimum tax using as the regular tax the income tax in the amount of $ 10,348 petitioners reported on their 1980 return, which was calculated1986 U.S. Tax Ct. LEXIS 111">*118 using the income averaging provisions of sections 1301-1305. This resulted in total taxes (income tax, self-employment tax, and alternative minimum tax, less credits) due in the amount of $ 13,086.25, which the Service Center86 T.C. 929">*931 assessed rather than the total taxes petitioners reported for 1980 in the amount of $ 11,259. ⁴

After the assessment, the Memphis Service Center notified petitioners that they owed additional taxes and interest in the amount of $ 1,927.41. By letters dated October 6, and December 17, 1981, petitioners objected to the assessment. On or about April 13, 1982, the Memphis Service Center abated $ 1,820 of the $ 13,086.25 that it had previously assessed. About 3 months after the abatement, petitioners' case was transferred at their request to the District Director in Greensboro, North Carolina. By a 30-day letter dated September 16, 1982, the District Director notified petitioners of1986 U.S. Tax Ct. LEXIS 111">*119 an adjustment to their alternative minimum tax in the amount of $ 1,865.25. This alternative minimum tax of $ 1,865.25 amounts to the difference between petitioners' tentative alternative minimum tax of $ 12,213.25 and the $ 10,348 regular tax figure reported on line 47 of their Form 1040. ⁵

Petitioners objected to the adjustment. They then1986 U.S. Tax Ct. LEXIS 111">*120 requested a conference with the Group Manager, which was held on October 20, 1982. Thereafter, petitioners and the appeals officer corresponded but did not resolve the dispute. Petitioners requested a conference with the Greensboro Appeals Office. By letter dated January 21, 1983, the appeals officer scheduled a conference but petitioners cancelled it. By letter dated March 9, 1983, the appeals officer attempted to conclude the matter. Petitioners responded by a letter dated March 11, 1983, in which they complained about the administrative handling of their case. ⁶

1986 U.S. Tax Ct. LEXIS 111">*121 86 T.C. 929">*932 By statutory notice of deficiency dated April 1, 1983, respondent determined that petitioners were liable for the alternative minimum tax and determined a deficiency of $ 1,865.25. See note 5 supra.

OPINION

In 1980, petitioners received a large amount of net long-term capital gain and elected to use income averaging to reduce their tax for the year. They were qualified for income averaging and properly computed their tax using income averaging. However, in determining whether or not they were liable for the alternative minimum tax under section 55, petitioners used the figure for the amount of tax they would have owed for 1980 had they not elected to use income averaging. Petitioners say that this treatment is proper because otherwise they will not enjoy the benefits of income averaging to which they are entitled. Respondent says petitioners' method is contrary to the statutory language and purpose of section 55. We agree with respondent.

Section 1 imposes the Federal income tax on individuals at different rates based on their filing status and their taxable income. Section 5(b)(2) provides that "For limitation of tax where an individual chooses the benefits of1986 U.S. Tax Ct. LEXIS 111">*122 income averaging, see section 1301." Section 1301⁷ provides that if taxpayers meet certain requirements, "then the tax imposed by section 1 for the * * * year which is attributable to averagable income shall be" as calculated thereunder. Thus, section 1301 limits the tax that would otherwise be imposed by section 1. Here, petitioners properly computed and reported their 1980 income tax under sections 1 and 1301.

Section 55⁸1986 U.S. Tax Ct. LEXIS 111">*124 imposes, in addition to all other taxes 86 T.C. 929">*933 imposed by the Code, an "alternative minimum tax" on noncorporate taxpayers. The 1986 U.S. Tax Ct. LEXIS 111">*123 first step in calculating the tax is determining "alternative minimum taxable income" under section 55(b)(1). ⁹ Here, there is no dispute that petitioners' alternative minimum taxable income is $ 100,853. Next, the sum of specified percentages of different levels of alternative minimum taxable income must be calculated pursuant to section 55(a)(1). The result of this computation is commonly referred to as "the tentative alternative minimum tax." Here, again, there is no dispute that petitioners' tentative alternative minimum tax is $ 12,213.25. Finally, the tentative alternative minimum tax is compared with the "regular tax" for the taxable year. If the tentative alternative minimum tax exceeds the regular tax, the excess is the alternative minimum tax due. Sec. 55(a). The dispute in this case is the proper figure to be used as petitioners' "regular tax."

During 1980, section 55(b)(2) defined the regular tax as "the taxes imposed by this chapter for the taxable year," with various deletions not here relevant. ¹⁰ On their 1980 86 T.C. 929">*934 Alternative Minimum Tax Computation (Form 6251), petitioners properly computed and reported their alternative minimum taxable income ($ 100,853) and tentative alternative minimum1986 U.S. Tax Ct. LEXIS 111">*125 tax ($ 12,213.25). However, instead of using the $ 10,348 tax they reported on their Form 1040 (calculated in part under the income averaging provisions of sections 1301-1305) as their regular tax, they used a figure calculated under section 1 without income averaging ($ 13,329). Thus, petitioners compared their tentative alternative minimum tax of $ 12,213.25 with that higher tax figure of $ 13,329 and concluded that no alternative minimum tax was due.

1986 U.S. Tax Ct. LEXIS 111">*126 Respondent says that petitioners should have compared the $ 12,213.25 tentative alternative minimum tax with the $ 10,348 actual tax reported on their Form 1040, and that petitioners are liable for the excess of $ 1,865.25 as alternative minimum tax. See note 5 supra. That is the result that would have been reached if petitioners had followed the instructions on Form 6251. In another case addressing a different issue under section 55, we have noted that Form 6251 carefully tracks the statutory provisions. See Huntsberry v. Commissioner, 83 T.C. 742">83 T.C. 742, 83 T.C. 742">745 (1984). Respondent argues that because petitioners elected to limit their section 1 tax under the income averaging provisions of sections 1301-1305, they must use the amount so determined as their regular tax in computing their alternative minimum tax. We agree because we think the provisions of the relevant statutes are clear and require this result.

As noted above, section 55(b)(2) (now section 55(f)(2)) defines regular tax as "the taxes imposed by this chapter for the taxable year." (Emphasis added.) "This chapter" is Chapter 1 of Subtitle A of the Code. It encompasses sections 1 through1986 U.S. Tax Ct. LEXIS 111">*127 1397. Thus, the regular tax includes the taxes imposed by sections 1 through 1397; in particular, the tax imposed by section 1. However, section 1301 allows a taxpayer to reduce the tax on averagable income thereunder. The amount so determined under section 1301 thus becomes the tax imposed by section 1. Sec. 1301; note 7 86 T.C. 929">*935 supra. This figure therefore is the regular tax and must be used in computing the alternative minimum tax.

Petitioners argue that section 55 does not contemplate use of the income averaging provisions in computing the alternative minimum tax. This case does not involve an attempt to use income averaging in computing the alternative minimum tax, ¹¹ but use of income averaging in determining petitioners' regular tax. In defining regular tax, section 55(b)(2) (now section 55(f)(2)) does not specifically refer to section 1301. Section 55(b)(2) (now section 55(f)(2)) does, however, refer to the tax imposed by section 1 (by referring to the taxes imposed by "this chapter"), which, if the taxpayer elects income averaging, is determined in part under section 1301. And as noted above, the computation under section 1301 then becomes the 1986 U.S. Tax Ct. LEXIS 111">*128 tax imposed by section 1. Petitioners would have us read section 55(b)(2) (now section 55(f)(2)) as defining regular tax as the tax computed under section 1regardless of the tax actually imposed thereunder. This we cannot do. The statutory language is "taxes imposed."

1986 U.S. Tax Ct. LEXIS 111">*129 Petitioners also contend that their situation is precisely the type Congress intended to cover by the income averaging 86 T.C. 929">*936 provisions and that imposition of the alternative minimum tax is unfair because it denies them the benefits of income averaging. Petitioners clearly qualified for income averaging. However, this is not the proper forum for petitioners' complaint that the alternative minimum tax unfairly denies them the benefits thereof. We must apply the statute as written and as written it applies to petitioners. We are not authorized to rewrite a statute merely because we may think its effect susceptible of improvement. Badaracco v. Commissioner, 464 U.S. 386">464 U.S. 386, 464 U.S. 386">398 (1984); Warfield v. Commissioner, 84 T.C. 179">84 T.C. 179, 84 T.C. 179">183 (1985), and cases cited therein. Moreover, the section 1 tax petitioners would owe if they had not elected income averaging ($ 13,329) is greater than their section 1 tax as limited by section 1301 ($ 10,348) plus their alternative minimum tax liability ($ 1,865.25) or a total of $ 12,213.25. Thus, the alternative minimum tax diminishes but does not deny petitioners the benefits of income1986 U.S. Tax Ct. LEXIS 111">*130 averaging.

Despite our determination that the statutory framework is clear on its face, we may nevertheless examine its legislative purpose. Warfield v. Commissioner, 84 T.C. 179">84 T.C. 182; Huntsberry v. Commissioner, 83 T.C. 742">83 T.C. 747, and cases cited therein. Unfortunately for petitioners, our review of the legislative history behind section 55 reveals no indication that Congress intended the result petitioners seek.

The alternative minimum tax was added by the Revenue Act of 1978 ¹² in conjunction with the decision to exempt the capital gain deduction under section 1202 from the add-on minimum tax under section 56. The congressional intent behind these changes was to remove the disincentives to capital formation associated with the add-on minimum tax on capital gains preferences, yet ensure that individuals having high incomes but paying low regular taxes would still be subject to a reasonable amount of tax on their capital gains. ¹³ In fact, the anticipated result of the alternative minimum tax was that "every individual will pay at least a minimum amount of tax with respect to large capital gains." H. Rept. 95-1445 (1978), 1986 U.S. Tax Ct. LEXIS 111">*131 1978-3 C.B. (Vol. 1) 86 T.C. 929">*937 181, 296. See S. Rept. 95-1263 (1978), 1978-3 C.B. (Vol. 1) 315, 499-500; Staff of Joint Committee on Taxation, 95th Cong., 2d Sess., General Explanation of the Revenue Act of 1978, at 261-262 (1979) quoted in 4 B. Bittker, Federal Taxation of Income, Estates and Gifts, par. 111.3.12, at 111-67 -- 111-68 (1981). Almost two-thirds of petitioners' adjusted gross income for 1980 was capital gain. Thus, this is precisely the type of situation that Congress intended to reach with the alternative minimum tax. We sustain respondent's determination.

To reflect the foregoing,

Decision will be entered for the respondent.