2
1992 in the amount of $574. After a concession,2 the issue for
decision is whether petitioner Betty Tolley was an active
participant in a qualified retirement plan during 1992, thus
precluding a deduction of $2,000 for a contribution by O.H.
Tolley, Jr., to an individual retirement account (IRA).
The facts have been fully stipulated and are so found. The
stipulation of facts and the attached exhibits are incorporated
herein by this reference. Petitioners resided in Pamplin,
Virginia, at the time their petition was filed. References to
petitioner are to Betty Tolley.
Petitioner was employed by S.H. Heironimus Co., Inc.
(Heironimus). Heironimus provided retirement benefits for its
employees in the form of a profit-sharing and savings plan (the
plan). During 1992, petitioner made no contributions to the
plan. During that same year, plan forfeitures in the amount of
$16.12 were allocated to petitioner's plan account.
On their Federal income tax return filed for the tax year
1992, petitioners claimed a contribution deduction in the amount
of $2,000. Petitioners reported adjusted gross income before the
IRA contribution deduction in the amount of $54,940.24.
In the notice of deficiency, respondent disallowed
petitioners' IRA contribution deduction because petitioner was
covered by a retirement plan at work. Therefore, applying
2 Petitioners concede that they failed to report $22 of
taxable interest income received in 1992.
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