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Respondent determined a deficiency of $4,472 in petitioners’
1997 Federal income tax. After concessions by the parties,2 the
issues are: (1) whether this Court has jurisdiction to consider
the propriety of a levy upon an individual retirement account
(IRA) of petitioner William J. Phillips, Jr. (petitioner-
husband); (2) whether the proceeds of the levy are included in
calculating petitioners’ modified adjusted gross income (MAGI)
for purposes of determining eligibility for the earned income
credit (EIC); (3) whether respondent should have allocated 10
percent of the proceeds of the levy to petitioners’ 1997 tax
liability; and (4) whether petitioners are entitled to a
deduction for payment of a portion of petitioner-husband’s
section 6672 liability. Petitioners resided in Wilkes-Barre,
Pennsylvania, at the time the petition was filed.
This case was submitted fully stipulated pursuant to Rule
122. The applicable facts may be summarized as follows. In
1988, respondent assessed a penalty under section 6672(a) for
failure to collect and pay over employment taxes against
2 Respondent concedes that petitioners are not liable for the
sec. 72(t) 10-percent additional tax in the amount of $1,045.
See Larotonda v. Commissioner, 89 T.C. 287 (1987). Except as
discussed infra, petitioners concede that the proceeds of the
levy on petitioner-husband’s IRA are includable in petitioners’
gross income. Additionally, in the petition, petitioners raised
the issue whether the notice of deficiency was valid.
Petitioners did not address this argument at the hearing or in
their trial memorandum, and it is deemed to have been conceded.
See Levin v. Commissioner, 87 T.C. 698, 722-723 (1986), affd. 832
F.2d 403 (7th Cir. 1987).
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