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Respondent determined a deficiency of $803 in petitioners’
2000 Federal income tax. This Court must decide whether
petitioners are entitled to a claimed $4,000 deduction for
contributions to their individual retirement accounts (IRA).
Some of the facts in this case have been stipulated and are
so found. Petitioners resided in La Grange, Illinois, at the
time they filed their petition.
Section 7491(a) does not apply because this case involves a
legal issue.
For taxable year 2000, petitioners jointly filed a Form
1040, U.S. Individual Income Tax Return. On their Form 1040,
petitioners reported taxable interest of $51,217.07, ordinary
dividends of $2,130.79, taxable refunds of $126, a business loss
of $10,144.92 from the sole proprietorship of petitioner Wayne E.
Burk (petitioner), and taxable pensions and annuities of
$3,107.04. Petitioners each claimed an IRA deduction of $2,000.
Respondent disallowed the total amount of $4,000 claimed by
petitioners.
Respondent contends that petitioners are not entitled to the
claimed IRA deduction because neither petitioner received
compensation, as defined in the Internal Revenue Code, during the
taxable year in issue.
Section 219(a) allows a deduction for qualified retirement
contributions of an individual. Section 219(b)(1) limits the
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