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The issue for decision is whether petitioners are entitled
to recover from respondent $7,253 in administrative costs
relating to petitioners’ claim for refund of $13,769 in overpaid
2001 Federal income taxes. Hereinafter, all references to
petitioner in the singular are to petitioner Morton Kwestel.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
At the time the petition was filed, petitioners resided in
Rockaway, New Jersey.
In 2001 petitioner converted a traditional IRA into a Roth
IRA under section 408A(d)(3).
For 2001, petitioners timely filed their joint Federal
income tax return and paid the tax shown due thereon. On their
return as filed, petitioners included in income the $55,065 in
accumulated untaxed IRA earnings.1
On October 14, 2002, petitioner timely reversed the
conversion of his Roth IRA back into a traditional IRA under
section 408A(d)(6).2
1Under sec. 408A(d)(3)(A) and (C), upon conversion of a
traditional IRA into a Roth IRA, the amount of untaxed earnings
in the IRA is includable in the taxpayer’s taxable income in the
year of the conversion.
2Under sec. 408A(d)(6), a conversion of a traditional IRA
into a Roth IRA may be reversed so long as the transfer of funds
reversing the conversion is completed by the tax return filing
(continued...)
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