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the $4,338.52 in income reported on the return representing the
taxable portion of the $8,361.36 pension paid by CalPERS. During
the year at issue, petitioner was divorced from her spouse, and
she contends that, in the property settlement, her spouse agreed
that he would pay the Federal income tax on the $4,338.52 in
CalPERS pension income. Petitioner contends that, because she
included the $4,338.52 as income on her return, she is entitled
to a credit or refund as an overpayment for the tax attributable
to the $4,338.52 in CalPERS income.
At trial, petitioner did not offer evidence to establish
that her former spouse had in fact agreed to liability for
payment of Federal income taxes on the CalPERS pension income.2
Even if petitioner had introduced such evidence, she would not be
entitled to exclude the pension payments from her income or be
entitled to a refund for the tax she paid on those amounts. The
law is well settled that, although under State law one spouse may
contract or obligate himself or herself for the tax liability of
the other spouse, such an obligation is not given credence in
determining the Federal income tax liability of the spouse for
whom the guaranty is given. The law is well settled that State
2CalPERS issued to petitioner a Form 1099-R, Distributions
From Pensions, Annuities, Retirement or Profit-Sharing Plans,
IRAs, Insurance Contracts, etc., in the amount of $4,338.52. The
Form 1099-R states that the income was a service retirement
benefit. The Court assumes, therefore, that petitioner and not
her former spouse had once been employed by the State of
California.
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Last modified: May 25, 2011