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In 1997, petitioner received total payments of $10,095 from
the Defense Finance and Accounting Service (DFAS). DFAS did not
withhold any income tax on this amount.
DFAS reported the $10,095 paid to petitioner in 1997 to the
Internal Revenue Service, utilizing Form 1099-R, Distributions
From Pensions, Annuities, Retirement or Profit-Sharing Plans,
IRAs, Insurance Contracts, etc. On the Form 1099-R, DFAS
reported both the gross distribution and the taxable amount as
$10,095.
Petitioner did not report any part of the $10,095
distribution that she received from DFAS in 1997 on her income
tax return, Form 1040A, for that year.
By notice dated August 18, 1999, respondent determined a
deficiency in petitioner’s income tax for 1997 in the amount of
$1,515. The deficiency is based on respondent’s determination
that the $10,095 distribution that petitioner received in 1997
from DFAS is includable in her gross income for that year.
Petitioner filed a petition with the Court disputing
respondent’s deficiency determination. Petitioner contends that
the military retirement pension is taxable solely to Col.
Fulgham. Petitioner also contends that because her share of such
pension was 20 percent net of withheld Federal income tax, she
should be credited with 20 percent of such withheld tax.
Regardless, petitioner contends that the $10,095 distribution
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