Joseph E. Simanonok - Page 12




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               We hold that petitioner’s military retirement pay is                   
          includable in petitioner’s gross income.  Respondent’s                      
          determination in this regard is sustained.                                  
          B.  Social Security Benefits                                                
               Petitioner contends that Social Security benefits “can’t be            
          the subject of a legal process”.  Essentially, petitioner                   
          contends that no portion of his Social Security benefits is                 
          subject to Federal income tax.  We disagree; petitioner’s                   
          contention is wrong, and it is frivolous.                                   
               Section 86 provides for the taxability of Social Security              
          benefits pursuant to a statutory formula.  Thus, if a taxpayer’s            
          “modified adjusted gross income” plus one-half of the taxpayer’s            
          Social Security benefits exceeds a certain base amount, then a              
          portion of the taxpayer’s Social Security benefits is includable            
          in gross income; i.e., such portion is subject to Federal income            
          tax.  Sec. 86(a)-(d); see Clark v. Commissioner, T.C. Memo. 1998-           
          280, affd. without published opinion 187 F.3d 641 (8th Cir.                 
          1999); Roberts v. Commissioner, T.C. Memo. 1998-172, affd.                  
          without published opinion 182 F.3d 927 (9th Cir. 1999).  That 42            
          U.S.C. sec. 407 (1994) may provide that a taxpayer’s Social                 
          Security benefits are not subject to levy or other legal process,           
          but see sec. 6334(c), has nothing to do with the taxability of              
          those benefits.                                                             
               In view of the foregoing, we hold that petitioner’s Social             
          Security benefits are includable in petitioner’s gross income as            





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