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Respondent determined a deficiency of $720 in petitioner’s
Federal income tax for 1997. The sole issue for decision is
whether $4,809 of unemployment compensation petitioner received
during 1997 is includable in her gross income.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the accompanying exhibits are
incorporated herein by reference. Petitioner resided in Lowell,
Massachusetts, at the time the petition in this case was filed.
Background
Petitioner timely filed her 1997 Federal income tax return
upon which she reported wages of $11,370 and Social Security
benefits in the amount of $4,809.
During 1997 petitioner received $4,809 of unemployment
compensation from the Commonwealth of Massachusetts. Petitioner,
however, reported the unemployment compensation on her 1997 Form
1040, U.S. Individual Income Tax Return, as Social Security
benefits. She elected to have the entire amount of her Federal
income tax refund directly deposited into her bank account.
Petitioner later called the Internal Revenue Service (IRS)
to check on the status of her $486 refund. An IRS employee
informed her that her refund was in the amount of $1,206, $720
more than she claimed on her return.
Petitioner was confused so she remained on the phone to
determine why the IRS had increased her refund. The IRS employee
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