-3-
received a Form RRB-1099-R, Annuities or Pensions by the Railroad
Retirement Board. Listed on the Form RRB-1099-R are the
following amounts:
Employee contributions $11,415.58
Contributory amount paid 14,970.84
Total gross paid 14,970.84
Federal income tax withheld -0-
Petitioners did not include any of the annuity payments as income
on their 2001 Federal income tax return.
Due to an adjustment made to petitioners’ 1999 Federal
income tax liability petitioners received a refund of $2,722 from
the Internal Revenue Service in 2001 that included an interest
payment to petitioners of $241. Petitioners also received $4 in
interest income from Provident Bank. The Internal Revenue
Service and Provident Bank each reported these respective
payments on a Form 1099-INT, Interest. Petitioners did not
include either interest payment as income on their 2001 Federal
income tax return.
Upon examination, respondent included the entire disability
annuity payments of $14,970.84 and the $245 of interest in
petitioners’ income for 2001.
Discussion
1. Railroad Retirement Disability Annuity Payments
Petitioners contend that the disability annuity payments are
not includable in gross income because they are attributable to a
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Last modified: May 25, 2011