2002 Tax Ct. Summary LEXIS 158">*158 PURSUANT TO INTERNAL REVENUE CODE SECTION 7463(b), THIS OPINION MAY NOT BE TREATED AS PRECEDENT FOR ANY OTHER CASE.
COUVILLION, Special Trial Judge: This case was heard pursuant to section 7463 in effect when the petition was filed.1 The decision to be entered is not reviewable by any other court, and this opinion should not be cited as authority.
Respondent determined a deficiency of $ 2,391 in petitioner's 1998 Federal income tax.
After concessions by petitioner of unreported interest income, a State income tax refund, and a retirement income distribution, the sole issue for decision is whether, under
Some of the facts were stipulated. Those facts and the accompanying exhibits are so found and are incorporated herein by reference. Petitioner's legal residence at the time the petition was filed was Weslaco, Texas.
Petitioner attained the age of 65 on July 1, 1996. He applied for and began receiving retirement Social Security benefits as of that date. Petitioner continued in gainful employment as an aeronautical engineer and was employed through the remainder of 1996, 1997, 1998, and 1999. At the time of trial, petitioner was no longer employed.
Because of petitioner's continued employment, his Social Security benefits were overpaid in each of the years 1996, 1997, and 1998. The overpayments were paid back through a reduction in petitioner's monthly Social Security benefits. From August 1998 through August 1999, all of petitioner's monthly benefits were applied toward the accumulated overpayment. From October 1999 through September 2000, no reductions were made to his benefits; however, in October 2000, regular reductions of $ 100 per month were made to apply against new2002 Tax Ct. Summary LEXIS 158">*160 overpayments in benefits. At the time of trial, petitioner still owed a balance of approximately $ 1,000, which was being reduced by the $ 100 monthly deduction from his Social Security benefits.
For the year at issue, 1998, petitioner's Social Security benefits for that year totaled $ 22,547 before any reductions to offset prior overpayments of benefits. For that year, $ 12,355 was withheld from petitioner's benefits and applied to the overpayments. Thus, petitioner was paid a net amount of $ 10,192 during 1998. Because petitioner was gainfully employed during 1998, and his earnings that year, as in past years, exceeded the allowable amount under Social Security, he continued accruing an overpayment of benefits. The amount of the overpayments for 1998 could not be determined until the succeeding year, 1999.
For the year 1998, the Social Security Administration issued a Form SSA-1099, Social Security Benefit Statement, to petitioner, which reflected total benefits to him of $ 22,547 for 1998 less reductions of $ 12,355 that were applied to reduce the overpayments in benefits to petitioner in prior years. The Form SSA- 1099 reflected net taxable benefits of $ 10,192 ($ 22,547 less2002 Tax Ct. Summary LEXIS 158">*161 $ 12,355).
On his Federal income tax return for 1998, petitioner did not include in gross income any Social Security retirement benefits for that year. In the notice of deficiency, respondent determined that the net Social Security benefits of $ 10,192 paid to petitioner during 1998 constituted income, and, pursuant to
There is no dispute that, under the formula provided in
The Court rejects petitioner's argument.
(2) Adjustment for repayments during year. --
(A) In general. -- For purposes of this section, the amount
of social security benefits received during any taxable
year shall be reduced by any repayment made by the taxpayer
during the taxable year of a social security benefit
previously received by the taxpayer (whether or not such
benefit was received during the taxable year).
Thus, it is evident from
2002 Tax Ct. Summary LEXIS 158">*164 Reviewed and adopted as the report of the Small Tax Case Division.
Decision will be entered for respondent.
1. Unless otherwise indicated, section references hereafter are to the Internal Revenue Code in effect for the year at issue.↩
2. The Form SSA-1099 issued by the Social Security Administration to petitioner for 1999 reflected total benefits of $ 31,688, benefits repaid to the Social Security Administration of $ 28,792, and net taxable benefits of $ 2,896. Thus, for the year 1999, petitioner was allowed an offset or reduction of his Social Security benefits for the overpayments to him during 1998 and prior years.↩