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set forth in the table above, petitioner did not receive any
“income” in 1996.2
On or about January 27, 1997, petitioner filed an income tax
return (Form 1040) for 1996. On the return, petitioner indicated
her filing status as “head of household” and claimed two
dependency exemptions.
On line 7 of Form 1040, petitioner reported “wages” in the
amount of $11,212. This amount consisted of the AFDC and SSI
payments, the Social Security disability benefits, and the gifts
as set forth in the table above. Petitioner reported no other
items of “income”, inserting the word “NONE” on each and every
line (other than line 7) of the “Income” portion of Form 1040.
Specifically, on line 12 (Business income or (loss)), petitioner
inserted the word “NONE”.
On page 2 of Form 1040, petitioner claimed the standard
deduction applicable to her indicated filing status ($5,900) and
the dollar value of 3 exemptions ($7,650), thereby reporting
taxable income of “-0-“. Petitioner did not claim any
2 Gifts are excluded from gross income, and welfare
benefits such as AFDC and SSI may also be excluded therefrom.
See sec. 102(a); Bailey v. Commissioner, 88 T.C. 1293, 1299-1301
(1987), acknowledging the “general welfare doctrine” of income
exclusion; cf. Notice 99-3, 1999-2 I.R.B. 10.
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