- 5 - not report the $22,820.23 on his 1993 Federal income tax return.3 In the notice of deficiency, respondent determined that petitioner should have reported the above amount. Petitioner’s Year-to-Date Earning Reports for 1989 and 1990 (i.e., the City’s employment records) show that no funds were withheld from petitioner’s wages to pay for the long-term disability plan. Francisco Gutierrez, the City’s administrative service manager in charge of payroll functions, testified that Standard’s insurance premiums, to the extent paid by employees, are typically paid through withholding and would be reflected on those earning reports. Discussion Respondent asserts that the distributions should be included in petitioner’s 1993 gross income because the City, not petitioner, exclusively funded the long-term disability plan under which petitioner benefited. Petitioner, on the other hand, argues that the payments should be excluded from gross income because he funded the disability plan through employee withholdings and because he was advised that the payments were not taxable. 3 Petitioner prepares his tax returns on the cash method of accounting.Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011