James E. Hendricks and Roberta J. Hendricks - Page 4




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               All of the funds in petitioner’s thrift savings account had            
          been distributed to him by the end of 1994.  He made no                     
          contributions to the thrift savings account in 1995.                        
          C.   Petitioner’s Section 401(k) Account With Bechtel                       
               Petitioner had a section 401(k) account with Bechtel to                
          which Bechtel contributed on petitioner’s behalf $8,994 in 1993,            
          $9,240 in 1994, and $8,355.70 in 1995.  Bechtel issued Forms W-2,           
          Wage and Tax Statement, for those years.                                    
          D.   Rollover From Petitioner’s Bechtel Trust & Thrift Plan to an           
               IRA and Withdrawal of IRA Funds                                        
               On November 27, 1995, petitioner received a $69,421.05                 
          distribution from the Bechtel Trust & Thrift Plan.  On December             
          6, 1995, petitioner deposited that amount in a Nations Bank                 
          Regular Money Market Individual Retirement Account.  Petitioner             
          withdrew $69,500 ($69,421.05 plus $78.95 in interest) from his              
          Nations Bank IRA in 1996.                                                   
          E.   Petitioners’ Income Tax Returns                                        
               Petitioners reported petitioner’s wages as income from 1993            
          to 1996.  Petitioners did not report as income the $8,994 in                
          1993, $9,240 in 1994, and $8,355.70 in 1995 that he contributed             
          to his section 401(k) account.  Petitioners did not attach a                
          statement to their 1996 income tax return disclosing the $69,500            
          withdrawal or explaining why they excluded that amount from their           
          1996 income.                                                                







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