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NYCERS sent petitioner two Forms 1099-R (Distributions from
Pensions, Annuities, Retirement Profit-Sharing Plans, IRAs,
Insurance Contracts, etc.) reflecting taxable amounts of $3,960
and $690.
On his 1996 Federal income tax return, petitioner itemized
his deductions on Schedule A and claimed a deduction of $4,653.55
for State and local taxes. Petitioner was entitled to a refund
of $368.55 from the State of New York for his 1996 tax year. In
1997, taxing authorities in New York did not issue a refund check
to petitioner; rather, the State applied the refund due to
petitioner to an outstanding New York State tax liability.
Respondent determined that petitioner failed to include as
income for 1997 the loan proceeds distributed from the plan.
Further, respondent determined that petitioner failed to include
as income the refund applied by the State of New York. Finally,
respondent determined that petitioner was liable for the
negligence penalty under section 6662(a).
Petitioner contends that the loans are not taxable income.
Petitioner argues that NYCERS and the publications from the
Internal Revenue Service (IRS) are at fault. Petitioner also
argues that the refund from the State of New York is not income
because he did not receive a refund check.
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Last modified: May 25, 2011