- 6 -
I have the problem with considering that as income,
when it isn’t, considering it as a distribution, which
it isn’t * * *. Now you owe tax on your Social
Security benefits, because you had so much money coming
in. But I didn’t have so much money coming in.
We disagree with petitioners’ contention. As a matter of
statutory interpretation, the plain language of the statute and
the regulations mandates that we sustain respondent’s
determination on the disputed issue.
B. Roth IRA
The Taxpayer Relief Act of 1997 (TRA 1997), Pub. L. 105-34,
sec. 302, 111 Stat. 788, 825, established a new individual
retirement plan called the “Roth IRA”, effective for taxable
years beginning after December 31, 1997.4 See sec. 408A.
Congress created the Roth IRA to further encourage individual
savings by allowing funds set aside in a tax-favored account to
be withdrawn without tax after a reasonable holding period for
retirement or certain special purposes. See H. Rept. 105-148, at
337 (1997), 1997-4 C.B. (Vol. 1) 319, 659; S. Rept. 105-33, at 29
(1997), 1997-4 C.B. (Vol. 2) 1067, 1109. The tax characteristics
of the Roth IRA are: (1) Contributions are nondeductible, sec.
408A(c)(1); (2) earnings accumulate tax free, sec. 408A(a); see
sec. 408(e); and (3) qualified distributions are not includable
4 On Feb. 4, 1999, the IRS issued final regulations, secs.
1.408A-1 through -9, applicable to taxable years beginning after
Dec. 31, 1997. See sec. 1.408A-9, Income Tax Regs.
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