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discrepancy between the amount of $31,267 shown on the 1998 Form
1099-R and the amount of $31,266 shown on the notice of
deficiency to be de minimis.
Petitioner contends that the restrictions of section 72 did
not apply to him. He asserts that he “wanted to test the
envelope.” Petitioner said he’s “heard of people trying it and
some getting away with it.” He also contends he is entitled,
based on his retirement contributions, to a greater tax-free
portion of the 1998 pension annuity distribution.
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 (1933). Petitioner does
not argue the applicability of section 7491(a), and the record
reflects that section 7491(a) does not apply.
Gross income generally includes income from whatever source
derived, including income from pensions and annuities. Sec.
61(a)(9), (11); sec. 72(a). Section 72 provides in general that
amounts received under an annuity contract are includable in
gross income except to the extent that such amounts are
considered to be a return of consideration paid. Specifically,
section 72(a) provides that unless otherwise provided, gross
income includes any amount received as an annuity.
Section 72(b), however, provides that a portion of the
annuity will be excluded from gross income. In particular, gross
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Last modified: May 25, 2011