Michael W. Allen - Page 4

          2000, and he reported his compensation from the tribe for serving           
          on the tribal council and the Simpson board on his return for               
          2001.  Petitioner reported tax due of $11,392 for 1999, $13,101             
          for 2000 and $8,643 for 2001.                                               
          Respondent’s Examination and the Petition                                   
               Respondent examined petitioner’s returns for the years at              
          issue and issued petitioner a notice of deficiency (deficiency              
          notice) dated September 18, 2003.  In the deficiency notice,                
          respondent determined that the compensation petitioner received             
          from the tribe for serving as an elected tribal council member              
          was taxable income for 1999 and 2000, that the IRA distributions            
          were includable in gross income for 1999 and 2001, that                     
          petitioner was not entitled to a $69,916 adjustment in 2001, and            
          that petitioner was liable for the accuracy-related penalty.                
               Petitioner timely filed a petition for review with this                
               Petitioner asserts that the income he received from both               
          GLITC and the tribe during the years at issue is exempt from                
          taxation,3 that he is entitled to deductions beyond those claimed           
          on his returns for the years at issue, and that he is not liable            

               3Although petitioner reported his compensation from GLITC              
          for all the years at issue and for serving on the Simpson board             
          and the tribal council in 2001 on his returns for the relevant              
          years, petitioner now contends that these items are exempt from             
          taxation.  A taxpayer’s characterization of an item on his or her           
          income tax return may be considered an admission against the                
          taxpayer’s interest.  Times Tribune Co. v. Commissioner, 20 T.C.            
          449, 452 (1953); Doll v. Commissioner, T.C. Memo. 2005-269.                 

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