Asa Eugene Pearson - Page 3




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               On January, 1, 1986, petitioner retired from General Motors            
          and began receiving monthly disability benefits.  Petitioner                
          received his retirement and his disability benefits in two                  
          separate monthly checks.  Petitioner received one check from                
          General Motors and one check directly from MetLife.  The payments           
          petitioner received from MetLife were payments made under the               
          disability plan and were based on the number of years petitioner            
          was employed by General Motors.                                             
               Though petitioner initially included his disability benefit            
          payments received from MetLife in gross income on his Federal               
          income tax returns, on advice of a tax preparer, petitioner filed           
          a Form 1040X, Amended U.S. Individual Income Tax Return, for the            
          1987 taxable year and reported the MetLife payments as nontaxable           
          disability income pursuant to sections 105(c)(1), 105(c)(2), and            
          section 1.105-3, Income Tax Regs., and requested a refund for               
          excess income tax withholding.                                              
               The Internal Revenue Service (IRS) allowed the requested               
          amounts as overpayments that it offset against outstanding income           
          tax liabilities.  Petitioner continued to request a refund for              
          excess income tax withholding for every taxable year from 1987,             
          up to, and including, the year in issue.  Once petitioner’s                 
          income tax liabilities were paid in full, the IRS refunded the              
          balance of the claimed excess withholding for tax years up to,              
          and including, 1995.                                                        





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