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181, and 183.1 The Court agrees with and adopts the opinion of
the Special Trial Judge which is set forth below.
OPINION OF THE SPECIAL TRIAL JUDGE
POWELL, Special Trial Judge: By notice of deficiency dated
May 25, 1995, respondent determined a deficiency in petitioners'
Federal income tax for the taxable year 1992 in the amount of
$1,348. At the time the petition was filed, petitioners resided
in Federal Way, Washington.
The issues are (1) whether petitioners are entitled to a
deduction for contributions made to Individual Retirement
Accounts (IRA's), and (2) whether petitioners are entitled to an
overpayment of income taxes paid on separation benefits received
from the U.S. Army (Army).
Petitioners timely filed a petition with this Court
disputing the disallowance of the IRA deduction and claiming an
overpayment in the amount of $17,103. The alleged overpayment
results from the inclusion of $70,070.60 in income that
petitioners contend is exempt from taxation under section
104(a)(4).
The facts concerning the $70,070.60 have their genesis in
the disintegration of the Soviet Union and the winding down of
1 Unless otherwise indicated, section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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