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The facts have been fully stipulated and are so found. All
section references are to the Internal Revenue Code in effect for
the years at issue, and Rule references are to the Tax Court
Rules of Practice and Procedure. Petitioners resided in
Philadelphia, Pennsylvania, at the time their petition was filed.
Background
Petitioner received worker’s compensation payments during
1996 and 1997 from a private insurer. Petitioners filed jointly
Forms 1040, U.S. Individual Income Tax Returns, for both years.
On their 1996 return, petitioners reported adjusted gross income
of $60,316. They reported Social Security benefits received of
$2,083 and treated $1,771 of that amount as taxable. Petitioners
did not report worker’s compensation benefits on their 1996
return.
Petitioner’s 1996 Form SSA-1099, Social Security Benefit
Statement, reports that petitioner received net benefits of
$37,548.1 The net benefits include payments made in 1996 of
$12,013 for 1994, $12,604 for 1995, and $12,932 for 1996. The
payments were reported as consisting of: (1) $1,743 paid by
check or direct deposit; (2) $340 in medicare premiums paid for
petitioner; (3) $34,967 in worker’s compensation offset; and (4)
$498 in attorney's fees and SSI offset.
1 All numbers have been rounded to the nearest dollar.
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Last modified: May 25, 2011