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Respondent determined a deficiency in petitioners' 1997
Federal income tax in the amount of $1,316. This Court must
decide whether petitioners must include a workers’ compensation
offset of $5,540.40 as part of their Social Security benefits.
Some of the facts in this case have been stipulated and are
so found. Petitioners resided in Cottage Grove, Minnesota, at
the time they filed their petition.
In September 1994, Phillis De Both (petitioner) was injured
in a workplace accident. Both of petitioner's arms were severed,
and she suffered other serious injuries.
Petitioner received workers' compensation benefits under
Minnesota law for her injuries. She also received Social
Security benefits under Federal law for her injuries.
CompCost, Inc. (CompCost), a State Fund Mutual Company,
handles the Minnesota workers’ compensation claims of petitioner.
On February 23, 1999, CompCost advised that the $25,000 threshold
under Minnesota law was met on May 2, 1996, and since that date
CompCost has been taking a Social Security offset against
petitioner’s workers’ compensation benefit.
The Social Security Administration filed a Form 1099 with
respondent which indicated that in 1997 petitioner received total
benefits of $5,723.90. Of that amount, $5,540 was not paid to
petitioner, but was a "Worker's compensation offset". In 1997,
petitioner received payments totaling $175 from Social Security,
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Last modified: May 25, 2011