- 2 - effect for the year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. Respondent determined a deficiency in petitioners’ Federal income tax of $2,968 for the taxable year 1997. The issues for decision are: (1) Whether certain Social Security disability benefits are includable in petitioners’ gross income; and (2) whether petitioners are entitled to a deduction for attorney’s fees incurred in obtaining the Social Security benefits.1 Some of the facts have been stipulated and are so found. The stipulations of fact and the attached exhibits are incorporated herein by this reference. Petitioners resided in Daly City, California, on the date the petition was filed in this case. During 1997, petitioner wife (Ms. Dela Cruz) received a lump-sum payment of $11,316 for Social Security disability benefits attributable to 1995 and 1996. Ms. Dela Cruz personally received $8,487 of this amount, and the remaining $2,829 was given to her lawyer. In addition, Ms. Dela Cruz’s daughter, 1Respondent has made two concessions. First, respondent has accepted an amended return filed by petitioners but not reflected in the notice of deficiency. The amended return reflects taxable income of $42,503, while the notice’s adjustments were made to taxable income of $43,289. Respondent concedes the difference. Second, respondent concedes a mathematical error in the notice: The “total increase” in income in the notice should read $9,850 rather than $9,856.Page: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011