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from the Hartford Life Insurance Co. These benefits were from a
health and accident plan provided by petitioner's former
employer.
On their Federal income tax return for 1997, petitioners
included as income the wages earned by Mrs. Thomas, the Hartford
Insurance Co. benefits, taxable interest income, and unemployment
compensation benefits. On lines 20a and 20b of the Form 1040,
U.S. Individual Income Tax Return, for Social Security benefits,
no amounts were entered as income. However, the following line
21, Other Income, included a typed notation: "TP claims exemption
on Disa", and the amount of $1 was entered as income.3
In the notice of deficiency, respondent determined that the
disability Social Security benefits were subject to tax under
section 86 and determined that $8,876 of those benefits was
includable in gross income. No other adjustments were made by
respondent to petitioners' 1997 return.
Petitioners contend that the disability Social Security
benefits are a health and accident insurance benefit under
3 Although petitioners did not address this entry at
trial, the Court surmises that the term "Disa" on line 21 of the
return was an intended synonym for disability income Social
Security benefits. Since petitioners contend that such benefits
are excludable from income, no explanation was advanced as to why
petitioners considered $1 of such benefits includable in gross
income as reported on line 21 of the return.
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