Frank Franklin - Page 8

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          indicate the type of plan involved.  Petitioner did not include             
          the $1,193 in gross income on his 1996 income tax return.                   
               At trial, petitioner acknowledged receiving moneys from                
          Metropolitan Life Insurance Co. and testified that he had a life            
          insurance policy with that insurer.  Petitioner contends the                
          distribution he received was a policy loan and, therefore, was              
          not gross income.  Petitioner presented no documentary evidence             
          to establish that he had received such a loan.  Petitioner agreed           
          that loan proceeds from an insurance policy generally do not                
          constitute gross income, yet, was unable to answer why his                  
          insurance company considered $1,193 of the distribution as a                
          taxable amount.  The Court concludes that petitioner has not                
          established that the proceeds he received from Metropolitan Life            
          Insurance Co. during 1996 were the proceeds of a loan or that               
          such distributions did not constitute gross income.  Respondent,            
          therefore, is sustained on this issue.                                      
               In the notice of deficiency, respondent determined that                
          petitioner was liable for the accuracy-related penalty under                
          section 6662(a) for negligence or intentional disregard of rules            
          or regulations with respect to the following adjustments:                   

               State income tax refund                      $1,503                    
               Unemployment compensation                       748                    
               Form 1099-R, Metropolitan Life Ins. Co.       1,193                    
               Tax withheld by Metropolitan Life Ins. Co.      119                    

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