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Respondent determined a deficiency of $3,348 in petitioner’s
1997 Federal income tax. The issue for decision is whether any
portion of the Social Security benefits paid to petitioner in
1997 are includable in his income for that year.
Background
Some of the facts have been stipulated and are so found. At
the time the petition was filed, petitioner resided in Mountain
View, California.
After he retired in 1992 at the age of 62, petitioner
applied for and began to receive Social Security benefits. In
1995, petitioner became reemployed and continued working
throughout 1997, during which period he also continued to receive
Social Security benefits. During the year in issue, he was paid
Social Security benefits totaling $13,865.
As a result of the other income earned by petitioner each
year during the years 1995 through 1997, petitioner was overpaid
Social Security benefits of $20,395.30 (the overpayment), which
included the amount of benefits petitioner received in 1997.
Consequently, the Social Security Administration (SSA) began to
withhold Social Security benefits to which petitioner was
otherwise entitled in order to recover the overpayment. The SSA
recovered $1,702 of the overpayment in 1997 and continued to
withhold all or part of petitioner’s Social Security benefits in
1998 and 1999. As of the date of trial, petitioner had not
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