John M. and Norma A. Mikalonis - Page 3




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                  Petitioners reported on their 1997 Form 1040, U.S.                                   
            Individual Income Tax Return, adjusted gross income of $50,338.                            
            Petitioners did not report worker’s compensation payments, but                             
            they did report Social Security benefits received of $2,152 and                            
            treated $1,829 of that amount as taxable.                                                  
                  Petitioner’s 1997 Form SSA-1099 reports that petitioner                              
            received net benefits of $13,309 for 1997.  The net benefits                               
            received were reported as consisting of:  (1) $1,626 paid by                               
            check or direct deposit; (2) $526 in medicare premiums paid for                            
            petitioner; and (3) $11,656 in worker’s compensation offset.  Of                           
            these amounts $498 is nontaxable payments.                                                 
                  Respondent determined that the worker’s compensation offsets                         
            reported on petitioner’s Forms SSA-1099 for taxable years 1996                             
            and 1997 must be included in his Social Security benefits                                  
            received.2  The deficiency at issue results from the                                       





                  2  Respondent also determined that the $498 reported as                              
            attorney's fees and SSI offset on petitioners’ 1996 Form SSA-                              
            1099, which petitioners failed to report on their 1996 Federal                             
            income tax return, are Social Security benefits received by                                
            petitioner.  It is not clear whether any of this amount is for                             
            1996 or whether it is attributable to the 2 earlier years for                              
            which benefits were paid in 1996.  Although petitioners contested                          
            in their petition the entire deficiency determined by respondent,                          
            they made no stipulations or argument on brief regarding this                              
            amount.  We thus deem them to have conceded this issue.  See                               
            Rybak v. Commissioner, 91 T.C. 524, 566 n.19 (1988); Zimmerman v.                          
            Commissioner, 67 T.C. 94, 104 n.7 (1976).                                                  






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