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Under present law, disability benefit payments are
generally considered as part of gross taxable income
for federal income tax purposes. When you are
disabled, the Company will not automatically withhold
income taxes from your LTD benefits. However, you may
arrange with the Company’s claim unit to have federal
income taxes withheld.
Although petitioner testified that his portion of the
premium was paid with ‘after tax’ dollars, both the brochure
detailing the plan and the petitioner’s Pay Statement provide no
evidentiary corroboration for these claims. Petitioner has
failed to provide any evidence illustrating that tax was
otherwise withheld from his disability payments in 2000.
Accordingly, petitioner is not entitled to exclude from gross
income one-sixth of the total amount of disability benefits paid
to him in the year at issue.
4. Additions to Tax
a. Section 6651(a)
Respondent determined an addition to tax as a result of
petitioner’s failure to file timely his Federal income tax
return for the year at issue. Section 6651(a)(1) imposes an
addition to tax for failure to file a return on the date
prescribed for filing, unless petitioner proves that such failure
to file was due to reasonable cause, and not willful neglect.
Sec. 6651(a)(1); Higbee v. Commissioner, 116 T.C. at 447.
Respondent must carry the burden of production with respect to
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Last modified: May 25, 2011