Asa Eugene Pearson - Page 7

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          of a wage continuation plan and are therefore nontaxable pursuant           
          to section 105(d).                                                          
               Pursuant to section 105(d), during years for which it was in           
          effect, payments made under wage continuation plans could be                
          excluded from gross income under certain conditions.  Section               
          105(d), however, was repealed, effective for taxable years after            
          1983 by the Social Security Act Amendments of 1983, Pub. L.                 
          98-21, sec. 122(b), 97 Stat. 85.                                            
               Finally, petitioner contends that the IRS refunded his taxes           
          for prior years after he filed an amended return in 1987 and that           
          by such action the IRS implicitly recognized that the MetLife               
          payments were nontaxable.  We do not agree.  Petitioner has                 
          failed to establish the reason for refunds he received in prior             
          years.  However, it is well established that even if petitioner             
          had presented proof that respondent may have overlooked or                  
          accepted the tax treatment of certain items in previous years,              
          respondent is not precluded from correcting that error in                   
          subsequent years with respect to the same taxpayer.  See Rose v.            
          Commissioner, 55 T.C. 28, 32 (1970).                                        
               At the conclusion of the trial, the Court instructed                   
          respondent to contact MetLife in order to get an accurate                   
          accounting of disability benefits paid to petitioner during the             
          1995 taxable year.  In an apparent answer to respondent’s query,            
          MetLife sent petitioner a Form W-2c, Statement of Corrected                 

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