- 3 -
contribution.2 Petitioners contend the $5,221 represented a
contribution to a SIMPLE IRA. That is the sole issue for
decision.
Although respondent determined that petitioners had not
proven that they paid $5,221 toward a qualified pension plan,
petitioners at trial, through their attorney, presented
documentation that petitioners had made a payment of $6,788 on
April 25, 2002, to Northwestern Mutual Life Insurance Co. Based
on that documentation, petitioners maintain that this amount
represented a contribution to a qualified plan. The claimed
contribution was in connection with the self-employment activity
of Richard C. Runyan (petitioner). The documents offered into
evidence characterized the $6,788 as a contribution to a
simplified employee IRA, which is commonly referred to as a
“SEP”. Such a plan is different from a SIMPLE plan or a SIMPLE
IRA.3 Petitioners contend, nevertheless, that they properly
established a plan by executing Form 5304-SIMPLE, Savings
2Two other adjustments in the notice of deficiency have been
conceded by petitioners: Unreported interest income of $182 and
a $2,136 distributive share of partnership income (Tomco Realty,
LLC).
3The term SIMPLE means Savings Incentive Match Plan for
Employees of Small Employers. The plan is effected by signing
Form 5304-SIMPLE, which is not filed with the IRS. A SEP means
Salary Reduction Simplified Employee Pension and originates with
execution of Form 5305-A, Salary Reduction Simplified Employee
Pension. That form also is not filed with the IRS. Neither Form
5304-A nor Form 5305-A was offered into evidence at trial.
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011