Humberson v. Commissioner

T.C. Memo. 1995-470

UNITED STATES TAX COURT

HAROLD L. AND GLADYS M. HUMBERSON, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 10066-93. Filed October 3, 1995.

Harold L. Humberson, pro se.

Alan R. Peregoy, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

DAWSON, Judge: This case was assigned to Special Trial

Judge Robert N. Armen, Jr., pursuant to the provisions of section

7443A(b)(4) of the Internal Revenue Code of 1986, as amended, and

Rules 180, 181, and 183.1 The Court agrees with and adopts the

1
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable year in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
 - 2 -

Opinion of the Special Trial Judge, which is set forth below.

OPINION OF THE SPECIAL TRIAL JUDGE

ARMEN, Special Trial Judge: Respondent determined a

deficiency in petitioners' Federal income tax for the taxable

year 1990 in the amount of $33,676.17. This amount includes the

10-percent additional tax imposed by section 72(t) on early

distributions from qualified retirement plans.

The pivotal issue for decision is whether the Transfer

Refund distribution received by petitioner Harold L. Humberson in

1990 from the Maryland State Teachers' Retirement System

qualifies for forward averaging under section 402(e)(1). The

resolution of this issue turns on whether the Transfer Refund

distribution constitutes a "lump sum distribution" within the

meaning of section 402(e)(4)(A).

Also for decision are: (1) Whether petitioners are liable

for the 10-percent additional tax imposed by section 72(t) on an

early distribution from a qualified retirement plan; and, if

petitioners are liable for any deficiency in tax, (2) whether

they are liable for interest on such deficiency.

FINDINGS OF FACT

Some of the facts have been stipulated, and they are

generally so found.2 Petitioners resided in Grantsville,

Maryland, at the time their petition was filed with the Court.

2
See infra notes 4 and 5. See also infra note 17 regarding
respondent's claim of an increased deficiency.
 - 3 -

Petitioner Harold L. Humberson (petitioner) was a teacher

with the Garrett County, Maryland, Public School System. During

the course of his teaching career, petitioner taught a variety of

subjects at various grade levels at different schools throughout

the county.

Petitioner's Transfer Refund Distribution

During most of his teaching career, petitioner was a member

of the Teachers' Retirement System of the State of Maryland (the

Retirement System). However, on January 30, 1990, petitioner

elected to transfer to the Teachers' Pension System of the State

of Maryland (the Pension System).3 Petitioner's election to

transfer from the Retirement System to the Pension System was

effective March 1, 1990.

The Retirement System is a qualified defined benefit plan

under section 401(a) that requires mandatory nondeductible

employee contributions. The Pension System is also a qualified

defined benefit plan under section 401(a), but generally does not

require mandatory nondeductible employee contributions. The

State of Maryland contributes to both the Retirement System and

the Pension System on behalf of the members of those systems.

The trusts maintained as part of the Retirement System and the

3
For a discussion of the Retirement System and the Pension
System, see generally Hylton v. Commissioner, T.C. Memo. 1995-27;
Hoppe v. Commissioner, T.C. Memo. 1994-635; Hamilton v.
Commissioner, T.C. Memo. 1994-633; Maryland State Teachers
Association v. Hughes, 594 F. Supp. 1353, 1357-1358 (D. Md.
1984).
 - 4 -

Pension System are both exempt from taxation under section

501(a).

As previously indicated, petitioner elected to transfer from

the Retirement System to the Pension System on January 30, 1990.

On the application to transfer, petitioner specifically opted to

receive, in a lump sum, the distribution to which he was entitled

upon transferring from the Retirement System to the Pension

System.

As a result of the election to transfer, petitioner received

a distribution (the Transfer Refund) from the Retirement System

in the amount of $158,680.98.4 Of this amount, $158,446.20 was

paid to petitioner by check dated March 31, 1990, from the

Maryland State Retirement Systems and the balance, or $234.78,

was paid by check dated May 31, 1990.

Petitioner's Transfer Refund of $158,680.98 includes

$21,765.02 in previously taxed contributions and $136,681.18 of

earnings.5 The earnings represent interest and constitute the

taxable portion of that part of the Transfer Refund that was paid

4
The parties stipulated that the Transfer Refund amounted
to $158,680.96. The documentary record clearly reveals, however,
that the correct amount is $158,680.98.
5
So stipulated. The sum of these two amounts equals
$158,446.20, which is the amount of the check dated March 31,
1990, from the Maryland State Retirement Systems. Although the
record is not completely clear regarding the status of the
balance of the Transfer Refund, i.e., the $234.78 amount that was
paid to petitioner by check dated May 31, 1990, it would appear
that this amount represents taxable employer "pickup"
contributions. See sec. 414(h).
 - 5 -

to petitioner in March 1990.

Petitioner did not ultimately roll over the Transfer Refund

into either an individual retirement account or an individual

retirement annuity.6

At the time that petitioner transferred from the Retirement

System to the Pension System, he had attained the age of 57. If

petitioner had not transferred to the Pension System but had

remained a member of the Retirement System, he would have been

entitled to retire and receive a normal service retirement

benefit, including a regular monthly annuity, under the

Retirement System. He would not have been entitled to receive a

Transfer Refund, however, because a Transfer Refund is payable

only as a consequence of transferring from the Retirement System

to the Pension System.

Also as a consequence of transferring from the Retirement

System to the Pension System, petitioner became a member of the

Pension System. As a member of the Pension System, petitioner

became entitled to receive a retirement benefit based upon his

salary and his creditable years of service, specifically

including those years of creditable service recognized under the

6
Petitioner initially rolled over the Transfer Refund into
an individual retirement account. Thereafter, in July 1990, the
Internal Revenue Service ruled that a transfer refund
distribution did not qualify for rollover treatment. Upon
learning of the ruling, petitioner withdrew the Transfer Refund
from his IRA and invested it elsewhere. As discussed infra,
petitioner reported the Transfer Refund as ordinary income on his
1990 Federal income tax return.
 - 6 -

Retirement System.7 However, because petitioner received the

Transfer Refund on account of transferring from the Retirement

System to the Pension System, the monthly annuity that petitioner

would receive upon retiring from the Pension System was less than

the monthly annuity that he would have received if he had not

transferred to the Pension System but had retired under the

Retirement System.

Petitioner's Retirement

On February 28, 1990, after he had elected to transfer from

the Retirement System to the Pension System, petitioner executed

a Letter of Intent in which he advised the Garrett County Board

of Education of his intent to retire by July 1, 1990.

Subsequently, on May 7, 1990, petitioner applied to the Maryland

State Retirement Systems for a normal service retirement from the

Pension System effective July 1, 1990. Two days later, on May 9,

1990, petitioner tendered his resignation to the Garrett County

Board of Education effective July 1, 1990.

Petitioner retired effective July 1, 1990, after nearly 30

years of service working as a teacher. At that time petitioner

was 58 years old.

As a result of his retirement, petitioner is receiving a

normal service retirement benefit from the Pension System based

7
Petitioner became a member of the Retirement System upon
his employment by the Garrett County Board of Education. He
remained a member of the Retirement System for all but the last
few months of his teaching career.
 - 7 -

upon his salary and his creditable years of service, specifically

including those years of creditable service recognized under the

Retirement System. However, as previously indicated, because

petitioner received the Transfer Refund on account of

transferring from the Retirement System to the Pension System,

petitioner's monthly annuity is less than the monthly annuity

that he would have received if he had not transferred to the

Pension System but had retired under the Retirement System.

Petitioner's 1990 income tax return

Petitioner received a corrected Form 1099-R (Total

Distributions From Profit-Sharing, Retirement Plans, Individual

Retirement Arrangements, Insurance Contracts, Etc.) from the

Maryland State Retirement Agency for 1990. The Form 1099-R

reported the payment of the Transfer Refund in the amount of

$158,680.98. The form also reported that the taxable portion of

the Transfer Refund was $138,228.88 and that petitioner's

previously taxed contributions amounted to $20,452.10.8

On their income tax return for 1990, petitioners reported as

ordinary income the taxable portion of the Transfer Refund, as

8
The discrepancy between the taxable portion of the
Transfer Refund as reported on the Form 1099-R, i.e.,
$138,228.88, and the taxable portion as stipulated by the parties
of that part of the Transfer Refund that was paid to petitioner
in March 1990, i.e., $136,681.18, is unexplained in the record.
Similarly, the discrepancy between the amount of petitioner's
previously taxed contributions as reported on the Form 1099-R,
i.e., $20,452.10, and petitioner's previously taxed contributions
as stipulated by the parties, i.e., $21,765.02, is also
unexplained in the record. In both instances, we accept the
parties' stipulation.
 - 8 -

set forth on the Form 1099-R, and elected 10-year forward

averaging under section 402(e)(1). In this regard, petitioners

attached Form 4972 (Tax on Lump-Sum Distributions) to their

income tax return and reported on said form ordinary income in

the amount of $138,229, i.e., the taxable portion of the Transfer

Refund as set forth on the Form 1099-R. Petitioners then

computed the tax on said amount and included such tax as part of

their total income tax liability on page 2 of their Form 1040.

Respondent's Notice of Deficiency

In the notice of deficiency, respondent determined that

petitioners do not qualify for 10-year forward averaging.

Accordingly, respondent treated the taxable portion of the

Transfer Refund, which she determined to be $136,094.23, as

subject to the regular income tax.9 Respondent also determined

that petitioners are liable for the 10-percent additional tax

imposed by section 72(t) based on the distribution in the

foregoing amount.

OPINION

Respondent contends that the Transfer Refund does not

qualify for forward averaging because it does not constitute a

"lump sum distribution" within the meaning of section

9
The discrepancy between the taxable portion of the
Transfer Refund as determined in the notice of deficiency, i.e.,
$136,094.23, and the taxable portion as stipulated by the parties
of that part of the Transfer Refund that was paid to petitioner
in March 1990, i.e., $136,681.18, is unexplained in the record.
We accept the parties' stipulation.
 - 9 -

402(e)(4)(A). Respondent also contends that petitioners are

liable for the 10-percent additional tax imposed by section 72(t)

because the Transfer Refund constitutes an early distribution

from a qualified retirement plan. Petitioners disagree.

Lump Sum Distribution Issue

As a general rule, a distribution from a qualified plan,

such as the Retirement System, is taxed to the recipient in the

year distributed under the rules relating to annuities. Sec.

402(a)(1); see sec. 72. However, section 402(e)(1) provides a

preferential forward averaging method of computing the tax on

certain such distributions. The parties agree that petitioners

are entitled to this preferential method of computing the tax on

the Transfer Refund if the Transfer Refund constitutes a "lump

sum distribution" within the meaning of section 402(e)(1)(A).10

A lump sum distribution, for purposes of section 402, is

defined in section 402(e)(4)(A) as follows:

(A) Lump sum distribution.--For purposes of this
section * * * , the term "lump sum distribution" means
the distribution or payment within one taxable year of

10
The Tax Reform Act of 1986 replaced the 10-year forward
averaging method with a 5-year forward averaging method for lump
sum amounts distributed after Dec. 31, 1986, in taxable years
ending after such date. Tax Reform Act of 1986, Pub. L. 99-514,
sec. 1122(a)(2), (h)(1), 100 Stat. 2085, 2466, 2470. However,
Tax Reform Act of 1986, secs. 1122(h)(5) and 1124 provide
transitional rules under which lump sum distributions made after
Dec. 31, 1986, will nevertheless continue to qualify, under
certain limited circumstances, for the more generous 10-year
forward averaging method; 100 Stat. 2085, 2471, 2475. Because of
his age, petitioner falls within the scope of the transitional
rules, provided, of course, that the Transfer Refund qualifies as
a lump sum distribution.
 - 10 -

the recipient of the balance to the credit of an
employee which becomes payable to the recipient--
(i) on account of the employee's death,
(ii) after the employee attains age 591/2,
(iii) on account of the employee's separation from the
service, or
(iv) after the employee has become disabled * * *
from a trust which forms a part of a plan described in
section 401(a) and which is exempt from tax under
section 501 * * * . For purposes of this subsection,
the balance to the credit of the employee does not
include the accumulated deductible employee
contributions under the plan (within the meaning of
section 72(o)(5)). [Emphasis added.]

There is no dispute that the Retirement System is a plan

described in section 401(a) and that the trust forming a part

thereof is exempt from tax under section 501. Moreover, there is

no dispute that the Transfer Refund distribution was made within

a single taxable year. Therefore, we must decide (1) whether

petitioner received the "balance to the credit" when he received

the Transfer Refund and (2) whether the Transfer Refund became

payable to petitioner "on account of the employee's separation

from the service".

In support of her determination that petitioner did not

receive the "balance to the credit" when he transferred from the

Retirement System to the Pension System, respondent relies on the

fact that petitioner's years of creditable service under the

Retirement System carried over to the Pension System, see Md.

Ann. Code, art. 73B, sec. 144(4) (1988), and on the related fact

that those years of service increased the monthly annuity benefit

to which petitioner is entitled.
 - 11 -

By contrast, petitioners contend that petitioner received

the entire account balance from the Retirement System when he

received the Transfer Refund.11 Therefore, petitioners conclude

that the "balance to the credit" requirement of section

402(e)(4)(A) is satisfied.

We begin our analysis with section 402(e)(4)(C). That

section provides, in relevant part, as follows:

(C) Aggregation of certain trusts and plans.--For
purposes of determining the balance to the credit of an
employee under subparagraph (A)--

(i) all trusts which are part of a plan shall
be treated as a single trust, all pension
plans maintained by the employer shall be
treated as a single plan * * * . [Emphasis
added.]

During the years in issue, the State of Maryland maintained

both the Retirement System, in which petitioner participated

until March 1, 1990, and the Pension System, to which petitioner

transferred effective as of that date. Accordingly, in order to

decide whether petitioner received the "balance to the credit",

we must treat the Retirement System and the Pension System as a

single pension plan. Sec. 402(e)(4)(C).

Under Maryland law, petitioner's annuity under the Pension

11
Respondent appears to concede implicitly that the
Transfer Refund included all of petitioner's contributions and
the earnings thereon. Cf. Wheeler v. Commissioner, T.C. Memo.
1993-561 (a member of the Retirement System did not receive the
"balance to the credit" upon receiving a Transfer Refund; a
portion of the member's contributions was transferred from the
Retirement System to the Pension System).
 - 12 -

System is calculated by taking into account petitioner's "average

final compensation" and petitioner's years of "creditable

service". Md. Ann. Code, art. 73B, sec. 145(2) (1988). Because

section 402(e)(4)(C) requires that we treat the Retirement System

and the Pension System as a single pension plan, we conclude

that, by transferring from the Retirement System to the Pension

System, petitioner did not forfeit his right to a future monthly

annuity, but simply elected to receive an initial single payment

to be followed by a reduced monthly annuity. Effectively,

petitioner's transfer allowed him to receive the "balance to the

credit" in two parts, an initial single payment to be followed by

a reduced monthly annuity, based on all of his years of

creditable service, and on his salary during those years. See

Green v. Commissioner, T.C. Memo. 1994-340.

The testimony of petitioner at trial reflects the foregoing.

Thus:

Q: * * * And you transferred to that Pension
System from the Retirement System in 1990; is that
correct?

A: Yes, sir.

Q: Okay. Do you know how your pension annuity is
currently calculated?

A: It's calculated on your number of years in
service and what your salary was.

Q: Okay. And do you know that your annuity was
calculated based on all of the years of service that
you had, the entire time you've been employed with the
State of Maryland?
 - 13 -

A: Yes, sir.

Q: So that those years would include the years of
which you are a member of the Retirement System; is
that correct?

A: Yes.

Q: Thank you. And do you also know that the
benefit in particular that you are now receiving under
the Pension System is calculated based on all of those
years? It's stipulated in paragraph 18, that the
benefit you're receiving in the Pension System is
calculated by including the years of creditable service
recognized under the Retirement System. That's your
understanding of what you're receiving now, correct?

A: Yes, sir.

In an effort to counter the foregoing, petitioners contend

that IRS Publication 575 (Pension and Annuity Income) and IRS

Publication 590 (Individual Retirement Arrangements), as well as

explications of those publications by the Maryland State

Retirement and Pension Systems, support petitioners' position

that the Transfer Refund constitutes a "lump sum distribution".

This contention, however, is contrary to the well-established

principle that the authoritative sources of Federal tax law are

the statutes, regulations, and judicial decisions, and not

informal publications authored by the Internal Revenue Service or

others. Zimmerman v. Commissioner, 71 T.C. 367, 371 (1978),

affd. without published opinion 614 F.2d 1294 (2d Cir. 1979);

Green v. Commissioner, 59 T.C. 456, 458 (1972). A fortiori,

explications of such publications by a Maryland State agency are
 - 14 -

similarly not authoritative.12

Petitioners also contend that the alleged failure by the

administrator of the Retirement Plan to provide the written

explanation required by section 402(f) is somehow attributable to

respondent and requires respondent to assume the burden of proof.

The short answer to this contention is that we have decided the

issue in dispute without regard to the burden of proof. In any

event, section 402(f) imposes a duty on plan administrators and

not on the Commissioner.13

Petitioners complain that neither the taxable amount of the

Transfer Refund nor the amount of petitioner's previously taxed

contributions has ever been precisely determined. Here we can

12
We observe that the IRS publications and the explications
thereof by the State agency are consistent with our analysis as
set forth above. For example, the agency describes a lump sum
distribution as "the distribution or payment within one tax year
of an employee's entire balance * * * from all of the employer's
qualified pension plans * * *." (Emphasis added.) IRS
Publication 590 describes a lump sum distribution similarly:
"Generally, a lump-sum distribution must include your complete
share * * * in all of your employer's pension plans." (Emphasis
added.)
We also observe that the Transfer Refund is not a lump sum
distribution for internal revenue purposes merely because it may
have been considered to be a "lump sum distribution" for purposes
of the Maryland State Teachers' Retirement System. For internal
revenue purposes, the term "lump sum distribution" is a term of
art and is expressly defined by section 402(e)(4)(A). For
internal revenue purposes, any other definition of the term is
simply irrelevant.
13
Moreover, it does not appear that the Transfer Refund was
even eligible for rollover treatment. See Dorsey v.
Commissioner, T.C. Memo. 1995-97; Brown v. Commissioner, T.C.
Memo. 1995-93.
 - 15 -

appreciate petitioners' frustration because, although these

amounts have not differed dramatically, they have not remained

constant throughout the administrative and pretrial stages of

this case. Nevertheless, petitioners ultimately stipulated to

the relevant amounts, and our findings are based on the parties'

stipulation.14

In view of the foregoing, we hold that the Transfer Refund

did not constitute a lump-sum distribution within the meaning of

section 402(e)(4)(A) because petitioner did not receive the

"balance to the credit" when he transferred from the Retirement

14
See supra note 5 and the associated text. We observe
that the Court offered to reopen the record after trial in order
to accommodate a revised stipulation. However, nothing was ever
forthcoming from the parties.
Of perhaps even greater significance is the fact that the
decision to be entered herein will reflect the deficiency as
determined by respondent and not an increased deficiency. See
infra note 17. In this regard we observe that the deficiency as
determined by respondent effectively credits petitioner with
previously taxed contributions in the amount of $22,586.75,
rather than the $21,765.02 amount that was stipulated by the
parties. As shown in the following table, the taxable amount of
the Transfer Refund, based on the amount of petitioner's
previously taxed contributions as credited in the notice of
deficiency, is less than it would be if the stipulated amount
were used:
Taxable Amount of Transfer Refund Taxable Amount of Transfer Refund
Per Notice of Deficiency Per Stipulation
Transfer Refund $158,680.98 Transfer Refund $158,680.98
less: Previously less: Previously
taxed contributions -22,586.75 taxed contributions -21,765.02
1
Taxable Amount $136,094.23 Taxable Amount $136,915.96
1
This amount consists of $136,681.18 of earnings on petitioner's previously taxed
contributions and $234.78 of employer "pick-up" contributions. See supra note 5 and
the associated text.
 - 16 -

System to the Pension System.15 Accordingly, the Transfer Refund

received by petitioner does not qualify for forward averaging

under section 402(e)(1). See Hamilton v. Commissioner, T.C.

Memo. 1994-633 (addressing whether a taxpayer had received the

"balance to the credit" in the context of whether the taxpayer

was entitled to compute tax on a transfer refund using the 10-

year forward averaging method set forth in section 402(e)(1));

Hoppe v. Commissioner, T.C. Memo. 1994-635 (same); Pumphrey v.

Commissioner, T.C. Memo. 1995-469 (same); see also Dorsey v.

Commissioner, T.C. Memo. 1995-97 (addressing whether a taxpayer

had received the "balance to the credit" in the context of

whether a Transfer Refund distribution qualified for tax-free

rollover treatment under section 402(a)(5); Brown v.

Commissioner, T.C. Memo. 1995-93 (same); cf. Wheeler v.

Commissioner, T.C. Memo. 1993-561.

In closing, we note that in a case decided earlier this

year, the United States District Court for the District of

Maryland reached the same conclusion in respect of the lump sum

15
In view of our conclusion that petitioner did not receive
the "balance to the credit" when he transferred from the
Retirement System to the Pension System, we are not required to
decide whether the Transfer Refund became payable to petitioner
on account of his separation from the service. We note, however,
that we have previously held in other cases, on facts
indistinguishable from those herein, that a transfer refund
distribution is not paid on account of an employee's separation
from the service, but rather on account of the employee's
election to transfer from the Retirement System to the Pension
System. Dorsey v. Commissioner, supra; Brown v. Commissioner,
supra; Hylton v. Commissioner, T.C. Memo. 1995-27.
 - 17 -

distribution issue that this Court has reached. Sites v. United

States, 75 AFTR 2d 95-2504, 95-1 USTC par. 50,280 (D. Md. 1995).

The final paragraph of the district court's analysis deserves to

be quoted:

The Court believes that the statutory analysis and
reasoning of Hoppe [v. Commissioner, T.C. Memo. 1994-
635] is sound. Because the Retirement System and
Pension System were both maintained by Taxpayer's
employer, the State of Maryland, they are to be
aggregated for purposes of determining the "balance to
the credit" of an employee under section 402(e)(4)(A).
Whereas Taxpayer received a refund of his contributions
and the accumulated interest, his service credits were
transferred to and remained within the Pension System.
* * * By choosing to transfer to the Pension System, *
* * [Taxpayer] opted * * * to receive a refund of his
contributions and accumulated interest along with
reduced annuity payments in the future. Thus, in
effect, Taxpayer elected to receive the "balance to the
credit" of his account in two-parts: the refund payment
and the future annuity payments. Consequently, he did
not receive the "balance to the credit" of his account
on * * * [the Transfer Refund date]. Id. [75 AFTR 2d
95-2504, 95-1 USTC par. 50280 at 88,031].

Section 72(t) Additional Tax Issue

We turn next to respondent's determination that petitioners

are liable for the 10-percent additional tax imposed by section

72(t).

Section 72(t) provides for a 10-percent additional tax on

early distributions from qualified retirement plans. Subsection

(1), which imposes the tax, provides in relevant part as follows:

(1) Imposition of additional tax.--If any taxpayer
receives any amount from a qualified retirement plan
* * * the taxpayer's tax under this chapter for the
taxable year in which such amount is received shall be
increased by an amount equal to 10 percent of the
portion of such amount which is includible in gross
income.
 - 18 -

By virtue of subparagraph (2)(A) of section 72(t), the 10-

percent additional tax does not apply to certain distributions.

Specifically, petitioners rely on clause (2)(A)(v), which

provides that the 10-percent additional tax does not apply to

distributions "made to an employee after separation from service

after attainment of age 55". (Emphasis added.) However, this

clause does not apply in the present case because the Transfer

Refund was paid to petitioner well before, and not after, he

separated from service.16

Even though the result we reach here may seem harsh to

petitioners, we may not ignore the plain language of the statute

and, in effect, rewrite it in order to achieve what might be

viewed by them as the more equitable result. See Hildebrand v.

Commissioner, 683 F.2d 57, 58 (3d Cir. 1982), affg. T.C. Memo.

1980-532; Zadan v. Commissioner, T.C. Memo. 1993-85. After all,

the power to legislate is exclusively the power of Congress and

not of this Court or any other. See Iselin v. United States, 270

U.S. 245, 250 (1926).

In view of the foregoing, we sustain respondent's

determination that petitioners are liable for the 10-percent

16
We also observe that the Transfer Refund was paid to
petitioner "on account of" his election to transfer from the
Retirement System to the Pension System and not "on account of"
his separation from the service. See Hylton v. Commissioner,
T.C. Memo. 1995-27 (addressing the maxim "causa causae est causa
causati"); see also Adler v. Commissioner, T.C. Memo. 1995-148,
on appeal (4th Cir. 1995); Dorsey v. Commissioner, 1995-97; Brown
v. Commissioner, T.C. Memo. 1995-93.
 - 19 -

additional tax imposed by section 72(t). See O'Connor v.

Commissioner, T.C. Memo. 1994-170; Wheeler v. Commissioner, T.C.

Memo. 1993-561; cf. Dorsey v. Commissioner, T.C. Memo. 1995-97;

Brown v. Commissioner, T.C. Memo. 1995-93.

Interest

Finally, having concluded that petitioners are liable for

the deficiency in income tax, including the 10-percent additional

tax imposed by section 72(t), we address petitioner's contention

that they should be relieved of liability for interest on the

deficiency.

Petitioners impressed the Court as honest and conscientious

taxpayers. Unfortunately, they experienced some frustration

during the examination of their 1990 income tax return. Although

the Court can appreciate petitioners' frustration, we must

nevertheless note that matters involving interest do not, as a

general rule, fall within the scope of this Court's jurisdiction.

Perkins v. Commissioner, 92 T.C. 749, 752 (1989); LTV Corp. v.

Commissioner, 64 T.C. 589, 597 (1975); see sec. 6404(e); Marine

v. Commissioner, 92 T.C. 958, 994 (1989), affd. without published

opinion 921 F.2d 280 (9th Cir. 1991); 508 Clinton St. Corp. v.

Commissioner, 89 T.C. 352 (1987). Although there are certain

narrowly defined exceptions to this rule, none of them apply in

this case. See, e.g., sec. 7481(c); Bax v. Commissioner, 13 F.3d

54 (2d Cir. 1993). In short, it is simply not within our power

in this case to relieve petitioners from any part of the interest

on the deficiency that will be due.
 - 20 -

Conclusion

In order to give effect to our disposition of the disputed

issues,

Decision will be entered

for respondent.17

17
On brief, respondent laconically claims an increased
deficiency. Sec. 6214(a). See supra notes 9, 14. However, we
think such claim was not properly raised, and we will not allow
it.