Richard L. and Betty L. Seltzer - Page 5

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          years in issue, petitioners listed the "taxable amount" of such                    
          items as $18,039, $21,923, and $23,169, respectively.  In                          
          computing the amounts reported on line 17b, petitioners reduced                    
          the amounts shown on line 17a for each year by $10,998, $10,242,                   
          and $10,672, respectively.  The amounts of the reductions relate                   
          entirely to the CSRS annuity distributions.                                        
                In the notice of deficiency respondent determined that                       
          petitioners were not entitled to the reductions claimed, and, in                   
          addition to other adjustments not in dispute, increased                            
          petitioners' income for each year in issue by the amount of the                    
          reduction claimed by petitioners in connection with petitioner's                   
          CSRS annuity distributions.6                                                       
                Respondent's determinations, having been made in a notice of                 
          deficiency, are presumptively correct, and petitioners bear the                    
          burden of proving that such determinations are erroneous.  Rule                    
          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).                              
                Although we are unable completely to follow petitioners'                     
          arguments, it appears that they take the position that the                         
          reductions, or exclusions, were proper for two reasons.  First,                    
          they claim that the reductions reflect amounts that they repaid                    
          to OPM during the relevant year.  As best as we can tell from the                  
          record, petitioners allege that petitioner repaid or contributed                   

          6In the notice of deficiency, respondent erroneously                               
          overstated the amount of the 1991 adjustment on this item.  The                    
          parties stipulated that the proper amount of the adjustment                        
          should have been $10,672.                                                          




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