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The sole issue for decision is whether a lump-sum payment to
Clenzo Knox (petitioner) during 2000 in the amount of $9,525 from
an “eligible State deferred compensation plan” under section 457
constitutes gross income.2
Some of the facts were stipulated and are so found. The
stipulation and annexed exhibits are so found and are
incorporated herein by reference. At the time the petition was
filed, petitioners were legal residents of Harvey, Louisiana.
For 29 years, petitioner was employed as a transit
supervisor for Regional Transit Authority, a bus line in New
Orleans, Louisiana. Petitioner’s employer was an agency of the
State of Louisiana, and his employer maintained a deferred
compensation plan that was qualified under section 457. Sometime
between 1988 and 1990, petitioner commenced making contributions
to the plan. His contributions were deducted from his wages.
Petitioner’s contributions, as well as those of the other plan
participants, were remitted to a plan administrator, PEBSCO.
Petitioner retired from his employment during 2000. For
reasons not addressed at trial, petitioner did not elect to
receive retirement benefits under the section 457 plan. Instead,
2On line 16a of their Federal income tax return for 2000,
petitioners reported total pensions and annuities income of
$4,772. The parties did not describe the nature of this pension
income at trial. The Court assumes that it is unrelated to the
$9,525 at issue.
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