This works for me. Are you sure you're indenting with tabs?
CC = gcc
CFLAGS = -g -pedantic -O0 -std=gnu99 -m32 -Wall
PROGRAMS = digitreversal
all : $(PROGRAMS)
digitreversal : digitreversal.o
[tab]$(CC) $(CFLAGS) -o $@ $^ $(LDFLAGS)
.PHONY: clean
clean:
[tab]@rm -f $(PROGRAMS) *.o core