Dale C. and Jacqueline L. Holt - Page 8




                                        - 8 -                                          

               Furthermore, publication 17 clearly states that service                 
          pension payments based on age or length of service are taxable.              
          It also states that disability retirement pensions based on                  
          percentage of disability are excluded from gross income.  The                
          "Sergeant Jones" example in Publication 17 is inapplicable to                
          petitioners.  That example involves disability retirement pay and            
          in no way supports petitioners' position.  Even if the example in            
          Publication 17 were applicable, IRS publications are only guides             
          for taxpayers; statutes, regulations, and judicial decisions will            
          govern.  Zimmerman v. Commissioner, 71 T.C. 367, 371 (1978),                 
          affd. without published opinion 614 F.2d 1294 (2d Cir. 1979);                
          French v. Commissioner, T.C. Memo. 1991-417.                                 
               Petitioners' final argument is that respondent should not be            
          allowed to change the treatment of the service pension, because              
          petitioners relied on advice from IRS personnel and were                     
          previously allowed the exclusions.  Unfortunately for                        
          petitioners, respondent is not precluded from correcting mistakes            
          made in the interpretation of the law.  Neri v. Commissioner, 54             
          T.C. 767, 772 (1970).                                                        
               To the extent that any of petitioners' other arguments were             
          not addressed by this Court, we have considered them and find                
          them to be without merit.                                                    
               Because a VA disability determination does not convert a                
          service pension into a disability pension, we find that                      





Page:  Previous  1  2  3  4  5  6  7  8  9  Next

Last modified: May 25, 2011