Bonnie J. and Ernest R. Werts - Page 3

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               Respondent determined a deficiency of $705 in petitioners'             
          Federal income tax for the year 2000.                                       
               The sole issue for decision is whether Social Security                 
          benefits received by petitioners during 2000 are includable in              
          gross income under section 86(a).                                           
               Some of the facts were stipulated.  Those facts and the                
          accompanying exhibits are so found and are incorporated herein by           
          reference.  Petitioners' legal residence at the time the petition           
          was filed was Carson City, Nevada.                                          
               Petitioners each received Social Security retirement                   
          benefits during the year 2000, which totaled $19,416.                       
          Petitioners were also gainfully employed during 2000 and earned             
          combined wage and salary income of $31,649 that year.                       
               For the year 2000, petitioners filed a Federal income tax              
          return on Form 1040EZ, Income Tax Return for Single and Joint               
          Filers With No Dependents.  On that return, petitioners reported            
          the $31,649 wage and salary income they earned that year.                   
          Petitioners, however, did not report as income any portion of the           
          $19,416 in Social Security benefits they received that year.2               


               2    The Form 1040EZ used by petitioners does not provide              
          for the reporting of other types of income, such as Social                  
          Security benefits.  That form contemplates only the reporting of            
          wage and salary income, taxable interest income, and unemployment           
          compensation.  Petitioners did not use the proper form.  They had           
          other sources of income; i.e., Social Security retirement                   
          benefits.                                                                   





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