3 in PERS is compulsory upon being employed, with some exceptions not relevant herein. During 1990, an aggregate of $133.88 was withheld from petitioner's wages and contributed to PERS. As the result of an extremely poor working relationship between petitioner and his direct supervisor, the Director of the program, petitioner chose to resign from his position effective February 1, 1991. At such time, he requested a full refund of his contributions to PERS. On or about October 22, 1991, petitioner rolled over the refund of $283.07 into an individual retirement account (IRA). Prior to April 15, 1991, petitioners opened two IRAs and made total contributions thereto of $2,834. Petitioners deducted this amount on their 1990 joint Federal income tax return and reported adjusted gross income for 1990 of $59,632.15. In the notice of deficiency, respondent disallowed the entire deduction of $2,834 on the ground that petitioner was an "active participant" in a plan established for employees of a State or political subdivision or agency thereof during the year at issue. As such, the limitation of section 219(g) on IRA contribution deductions was applicable and resulted in the total disallowance of the amount claimed by petitioners. Petitioner argues that he was not an active participant within the meaning of section 219(g)(5) because PERS is a deferred compensation plan and serves as a substitute for Social Security in the State of Ohio. Petitioner further argues that it would be inequitable toPage: Previous 1 2 3 4 5 6 7 8 9 Next
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