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Petitioner attached to the Form 1040 a Form W-2, Wage and
Tax Statement, from the Pawtucket Public School System (Pawtucket
School) disclosing the payment of wages to Mrs. Kirshenbaum in
the amount of $45,504.70 during 1998. The Form W-2 indicated
that Mrs. Kirshenbaum contributed to an “ERS”11 and that she was
an active participant in a qualified retirement plan.
D. Respondent’s Deficiency Notice
In the notice of deficiency, respondent determined that
petitioner received a taxable IRA distribution of $49,997.15 on
the basis that petitioner did not roll over his IRA distribution.
Respondent also determined that petitioner received taxable
Social Security benefits of $12,475, which was not disability
income. In addition, respondent determined that both petitioner
and Mrs. Kirshenbaum were not entitled to IRA contribution
deductions because they did not substantiate their IRA
deductions. Finally, respondent determined that petitioners are
liable for an accuracy-related penalty due to a substantial
understatement of income tax.
Discussion
In general, the determinations of the Commissioner in a
notice of deficiency are presumed correct, and the burden is on
the taxpayer to show that the determinations are incorrect. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933). Under
11 ERS stands for “Employee Retirement System”.
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Last modified: May 25, 2011