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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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