Richard and Arline Muller - Page 3




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               Respondent determined a $12,567 deficiency in petitioners’             
          2003 Federal income tax and a $2,513 accuracy-related penalty               
          under section 6662(a).  The issues for decision are:                        
          (1) Whether a distribution from an individual retirement account            
          (IRA) is includable in petitioners’ 2003 income; and (2) whether            
          petitioners are liable for the accuracy-related penalty.                    
                                     Background                                       
               Some of the facts have been stipulated and are so found.               
          Petitioners are and were at all times relevant married to each              
          other.  Their joint 2003 Federal income tax return was timely               
          filed.  References to petitioner are to Richard Muller.                     
               Petitioner, who was born in 1934, spent most of his working            
          career in the trucking industry.  One of his former employers               
          went out of business during 2000.  As a result, petitioner                  
          received a $72,000 distribution from some type of employment-               
          based employee benefit plan.  No portion of the $72,000                     
          distribution was included in the income reported on petitioners’            
          2000 joint Federal income tax return.  As best can be determined            
          from the record, at least a portion of the $72,000 distribution             
          made its way into an individual retirement account that                     
          petitioner maintained with Commerce Bank.                                   
               The total value of the IRA as of January 1, 2003, was                  
          $47,860.49.  Three interest accruals totaling $595.62 added to              
          the balance of the IRA during 2003; otherwise there were no                 







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