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Respondent asserts that petitioners received unreported or
underreported taxable income from the following sources: (1)
$372,850 from the distribution from Plan 15104, of which only
$192,850 was reported; (2) $14,443 and $30,623 from the
offsetting distributions made in satisfaction of the loans from
Plan 15105 and Plan 15106, respectively, none of which was
reported; and (3) $749,930 on the distributions from the Fidelity
IRA and the US Bancorp IRA, of which only $444,327 was reported
as being taxable.8 Respondent raised these matters in the
amendment to answer, not in the notice of deficiency, and now
seeks an increased deficiency based in part on these new matters.
Therefore, respondent bears the burden of proof with respect to
these new matters. See Rule 142(a).
Petitioners dispute respondent’s assertions and argue that,
of the $746,191 reported as taxable income on the Intel W-2,
$606,963 is not included in gross income.9
8 Petitioners also received but did not report a State
income tax refund of $34,500. As noted above, the parties agree
that petitioners are liable for Federal income tax in 2000 on
that refund. See supra note 4.
9 On petitioners’ first and second Forms 1040X, petitioners
assert that their taxable income should be reduced by $632,639.
In their amended petition and on brief, petitioners argue that
their taxable income should be reduced by $606,963. The origin
of this discrepancy is unclear.
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