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Respondent determined a deficiency in petitioners' Federal
income tax for the taxable year 1992, as well as an accuracy-
related penalty for negligence under section 6662(a), in the
amounts of $6,176 and $1,235, respectively.
Respondent subsequently conceded that petitioners are not
liable for the accuracy-related penalty. Accordingly, the sole
issue for decision is whether petitioners may exclude from gross
income the disability benefits that petitioner Thomas J. Rabideau
received from his former employer.2
FINDINGS OF FACT
Some of the facts have been stipulated, and they are so
found. Petitioners resided in Pardeeville, Wisconsin, at the
time that their petition was filed with the Court.
Petitioner Thomas J. Rabideau (petitioner) was employed by
Metropolitan Life Insurance Co. (Met Life) from no later than
1981 through 1989.
During 1989, Met Life maintained a "flexible benefits plan",
or "cafeteria plan", that allowed eligible employees to select
between different types of benefits and cash. Specifically, the
flexible benefits plan offered medical, dental, long-term
disability, and life insurance benefits to eligible employees of
Met Life.
2 An adjustment to petitioners' earned income credit is a
mechanical matter, the resolution of which depends on our
disposition of the issue for decision.
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