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Respondent determined a deficiency in petitioner’s Federal
income tax of $4,867 and an addition to tax of $195 under section
6651(a)(1) for the taxable year 2001.
After concessions, the issue remaining for decision is
whether certain payments made by insurance companies, during the
year in issue, of indebtedness owing by petitioner on credit
cards constitute gross income in the amount of $15,8841 under
section 61(a).
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts, stipulation of settled issues, and the
attached exhibits are incorporated herein by this reference. At
the time of filing his petition, petitioner resided in Schertz,
Texas.
Prior to 2001, petitioner was employed in a civilian
position at Kelly Air Force Base (Kelly AFB) in San Antonio,
Texas. While employed at Kelly AFB, petitioner availed himself
of the opportunity to purchase credit card insurance from
American Security Insurance Company (American Security) and
Capital One Bank (Capital One) that provided for the payment of
1Respondent conceded $596 of this amount, as explained
later.
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