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default. We, therefore, sustain respondent's determination on
this issue.
2. Form W-2 Income
During a portion of 1991, petitioner was employed by
Strahman Valves, Inc. (Strahman). On his 1991 return, petitioner
reported wage income attributable to his employment at Strahman
in the amount of $20,694.16. Respondent determined that
petitioner was liable for unreported wage income in the amount of
$23.20. The parties agree that the amount in question relates to
the cost of the portion of employer-provided group term life
insurance for coverage in excess of $50,000.
Section 79(a) provides that an employee shall include in his
gross income the cost of group term life insurance on his life,
provided under a policy carried by his employer, but only to the
extent that the cost exceeds the sum of the cost of $50,000 of
the insurance plus any amounts paid by the employee toward the
purchase of the insurance. Petitioner does not dispute that the
$23.20 represents the cost of employer-provided coverage on his
life in excess of the cost of $50,000 in coverage. Rather,
petitioner argues that because his earned income was less than
$50,000 during 1991, the amount in question should not be
taxable.
Petitioner has misinterpreted section 79. The $50,000
threshold refers to the employee's coverage amount under a group
term life insurance policy, not to the employee's earned income.
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