Fr. v. Comm'r

T.C. Summary Opinion 2006-136

UNITED STATES TAX COURT

LARRY J. AND CATHERINE E. FRANCE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 3243-03S. Filed August 30, 2006.

Larry J. France, pro se.

Bradley C. Plovan, for respondent.

POWELL, Special Trial Judge: This case was heard pursuant

to the provisions of section 74631 of the Internal Revenue Code

in effect at the time the petition was filed. The decision to be

entered is not reviewable by any other court, and this opinion

should not be cited as authority.

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

Respondent determined a deficiency of $1,226 and an

accuracy-related penalty under section 6662(a) of $245 in

petitioners’ 2000 Federal income tax.

After a concession by respondent,2 the issues are (1)

whether petitioners3 are entitled to exclude from gross income

payments made by the County of Baltimore, Maryland, pursuant to

provisions of the Employees’ Retirement System of Baltimore

County (ERS), (2) whether petitioners overstated Catherine E.

France’s wages by $737 on their 2000 Federal income tax return,

and (3) whether we have jurisdiction over a deficiency in

petitioners’ 1997 income tax.4

The findings of fact and conclusions relevant to each issue

are summarized below. Petitioners resided in Finksburg,

Maryland, at the time their petition was filed.

2
Respondent concedes that petitioners are not liable for
the accuracy-related penalty under sec. 6662(a) for taxable year
2000.
3
Petitioner Catherine E. France did not appear at the
trial and did not execute the stipulation of facts. With respect
to her, we will dismiss this case for failure to prosecute. See
Rule 123(b). The decision, when entered, will be in the same
amount as ultimately determined against petitioner Larry J.
France. In the opinion, references to petitioner are to Larry J.
France.
4
Respondent also made a computational adjustment to
petitioners’ taxable Social Security income for taxable year 2000
based on the proposed increase to petitioners’ taxable income.
Resolution of this issue will depend on our decision regarding
petitioners’ gross income for taxable year 2000.
 - 3 -

Issue 1. ERS Payments

A. Background

Petitioner was born in 1946. Petitioner worked for the

County of Baltimore, Maryland, from July 11, 1981, until June 28,

1996.

During his tenure with Baltimore County, petitioner was a

member of the ERS of Baltimore County, a defined benefit plan

established under the Baltimore County Code5 to provide

retirement benefits to employees in the service of Baltimore

County. Pursuant to the ERS provisions of the Baltimore County

Code, petitioner was required to contribute a percentage of his

salary to the ERS through automatic payroll deductions.

Petitioner’s contributions were made on an after-tax basis prior

to October 1, 1989, and on a pre-tax basis thereafter. Baltimore

County Code sec. 23-91(g) (1988). Pursuant to Baltimore County

Code section 23-91(g) (1988), the pre-tax employee contributions

petitioner made after October 1, 1989, were “pick up”

contributions made by Baltimore County in accordance with section

414(h)(2). As such, the pick up contributions were

5
Baltimore County Code sec. 23-1 et seq. (1988). The
ERS provisions of the Baltimore County Code were recodified in
2003.
 - 4 -

treated as employer contributions and were not included in

petitioner’s gross income.6

Over the course of his employment, petitioner held several

positions with Baltimore County, the last of which was assistant

supervisor of the Animal Control Division. On November 29, 1993,

while performing his duties in this position, petitioner was

involved in an automobile collision. Petitioner injured his left

wrist in this collision.7

In early 1994, petitioner underwent surgery and physical

therapy to treat his injured wrist. Petitioner returned to his

post as assistant supervisor with the Animal Control Division in

April 1994. Petitioner’s job performance was not affected by the

injury to his left wrist because he is right-handed.

After petitioner’s return to work, petitioner’s supervisor

did not allow petitioner to resume performing the duties he had

performed as assistant supervisor prior to taking time off to

treat his injured wrist. Petitioner’s supervisor did not allow

6
In accordance with sec. 414(h)(2), the ERS provides
that the pick-up contributions are not included as gross income
of a member until the pick-up amounts are distributed or made
available to the member. Baltimore County Code sec. 23-91(g)
(1988).
7
For certain of the facts summarized in this opinion, we
rely on the opinion and order in In the Matter of Larry France,
Case No. CBA-96-176 (Sept. 10, 1997), issued by the County Board
of Appeals of Baltimore County in response to petitioner’s
application for disability retirement benefits under the
provisions of the ERS.
 - 5 -

him to perform his duties for “personal reasons” and not because

of the injury to petitioner’s wrist.

Petitioner became increasingly upset as a result of the

treatment he believed he was receiving from his supervisor. In

October 1994, petitioner began receiving psychological counseling

from mental health professionals. Petitioner was placed on

medication and ultimately diagnosed with depression and an

anxiety disorder.

Petitioner’s difficulties with his supervisor continued

until January 1996. At that time, petitioner’s mental health had

deteriorated to the point that his physician recommended he stop

working at the Animal Control Division. In accordance with this

recommendation, petitioner left the Animal Control Division on

sick leave beginning February 6, 1996.

In June 1996, while still on sick leave, petitioner was

notified by the County that his position would be terminated by

June 30, 1996, due to budget constraints. On June 26, 1996,

petitioner applied for disability retirement benefits pursuant to

the provisions of the ERS. Petitioner was 50 years old at the

time he applied for disability retirement benefits.

Petitioner’s employment with the County ended on June 28, 1996.

Under the ERS, service retirement benefits are available for

members who attain specified age and service requirements.

Members are generally eligible for normal service retirement
 - 6 -

after the attainment of age 60 or after 30 years of service with

Baltimore County. Baltimore County Code sec. 23-48 (1988).

In addition to service retirement, the ERS provides for two

kinds of retirement benefits incident to disability: Ordinary

and accidental. Ordinary disability retirement benefits are

available

Upon the application of a member in service or of
the employer * * * who has had five (5) or more years
of creditable service * * * provided that the Medical
Board, after a medical examination of such member,
shall certify that such member is mentally or
physically incapacitated for the further performance of
duty, that such incapacity is likely to be permanent,
and that such member should be retired.

Baltimore County Code sec. 23-53 (1988). Accidental disability

retirement benefits are available to a member “who has been

totally and permanently incapacitated for duty as the natural and

proximate result of an accident occurring while in the actual

performance of duty at some definite time and place, without

willful negligence on the member’s part”. Baltimore County Code

sec. 23-55 (1988).

In November 1996, the board of trustees of the ERS denied

petitioner’s application for disability retirement benefits

because it was unable to certify that petitioner was mentally or

physically incapacitated. Petitioner appealed the decision to

the County Board of Appeals of Baltimore County (Board of

Appeals).
 - 7 -

On appeal, the Board of Appeals considered whether

petitioner had established that he was permanently incapacitated

for the further performance of his duties and therefore entitled

to either an ordinary disability retirement benefit under

Baltimore County Code section 23-53 (1988), or an accidental

disability retirement benefit under Baltimore County Code section

23-55 (1988). In an opinion and order dated September 10, 1997,

the Board of Appeals found the following:

Regarding the issue of whether the mental health
problems experienced by * * * [Mr. France] arose as the
natural and proximate result of the automobile accident
suffered by Mr. France on November 29, 1993, the Board
concludes that * * * [Mr. France] has not satisfied his
burden in this instance. Only the physical injury to
the left wrist was the direct result of that accident,
and we look to * * * [the] assessment that Mr. France’s
wrist is 30 percent impaired and to a general agreement
among witnesses on both sides that Mr. France’s ability
to do the job as Assistant Supervisor of Animal Control
would not be negated by this impairment.

However, the Board does find that the mental
health disorders of depression and anxiety that Mr.
France developed in the workplace following the
accident have rendered Mr. France incapable of
performing the job for which he was hired. We are
persuaded by the clear and definitive statements of
accepted experts in the mental health field * * * that
Mr. France is mentally incapacitated and that
incapacitation is likely to be permanent. The Board
notes that Mr. France’s exemplary performance record
for 16 years of employment with Baltimore County is at
odds with the anxious, uncertain demeanor of the man
who testified of his hopelessness and fears for his
future.

We are satisfied that the accident itself did not
cause the mental health problems complained of, and,
therefore, while accidental disability benefits are
denied, the Board finds Mr. France deserving of
 - 8 -

ordinary disability retirement benefits, and will so
order. [In the Matter of Larry France, Case No.
CBA-96-176 (Sept. 10, 1997); emphasis added.]

Consistent with these findings, the Board of Appeals denied

petitioner’s application for “accidental disability retirement,”

but reversed the decision of the ERS board of trustees and

granted petitioner “ordinary disability benefit[s].”

For taxable year 2000, petitioners received annuity and

pension income8 from the ERS totaling $15,274, of which the ERS

reported $15,019 as taxable income.9 Petitioners did not report

this income on their timely filed 2000 Form 1040, U.S. Individual

Income Tax Return. Respondent determined that $15,019 of the

annuity and pension income from the ERS should have been included

in petitioners’ 2000 gross income.

8
Pursuant to Baltimore County Code sec. 23-54 (1988),
petitioner’s ordinary disability retirement allowance consists of
both an annuity and a pension. The annuity is the actuarial
equivalent of petitioner’s accumulated contributions to the ERS
at the time of retirement, and the pension is based on a formula
involving petitioner’s “average final compensation”.
9
The $255 difference between the amount petitioners
received from the ERS and the amount reported as taxable
represents a return of petitioner’s after-tax contributions to
the ERS.
 - 9 -

B. Discussion10

1. Gross income

Section 61 provides that “gross income means all income from

whatever source derived”. Gross income is an inclusive term with

broad scope, designed by Congress to “exert * * * ‘the full

measure of its taxing power.’” Commissioner v. Glenshaw Glass

Co., 348 U.S. 426, 429 (1955) (quoting Helvering v. Clifford, 309

U.S. 331, 334 (1940)). Annuities and pensions are enumerated

among the items of income included under section 61. Sec.

61(a)(9), (11).

Statutory exclusions from income are matters of legislative

grace and are narrowly construed. Commissioner v. Schleier, 515

U.S. 323, 328 (1995); Mostowy v. United States, 966 F.2d 668, 671

(Fed. Cir. 1992). Further, “exemptions from taxation are not to

be implied; they must be unambiguously proved.” United States v.

Wells Fargo Bank, 485 U.S. 351, 354 (1988). Taxpayers seeking an

exclusion from income must demonstrate they are eligible for the

exclusion and bring themselves “within the clear scope of the

exclusion.” Dobra v. Commissioner, 111 T.C. 339, 349 n.16

(1998).

Petitioner’s primary argument is that the ERS payments are

excludable from gross income because they are “disability”

10
Because the Court decides the issues in this case
without regard to the burden of proof, sec. 7491 is inapplicable.
 - 10 -

benefits awarded by the Board of Appeals for injuries sustained

by petitioner in the workplace, rather than “retirement”

benefits. To support this, petitioner points to the language of

the Board of Appeals’ order, which awarded petitioner “ordinary

disability” benefits rather than “ordinary disability retirement”

benefits. Petitioner asserts that the Board of Appeals’ order of

“ordinary disability” benefits reflects the fact that petitioner

did not “retire” but was “terminated” from his job with Baltimore

County, and that petitioner, who was 50 years old at the time he

left his job, was ineligible for “retirement” under the ERS.

It is clear on the record before us that petitioner applied

for, and received, disability retirement benefits pursuant to the

ERS. The ERS includes provisions that allow for retirement and

the receipt of retirement benefits due to mental or physical

impairment, in addition to retirement based on age or years of

service. The Board of Appeals’ opinion found that petitioner was

permanently incapacitated for the further performance of his

duties and “deserving of ordinary disability retirement

benefits”, as delineated under the ERS in Baltimore County Code

section 23-53 (1988). The Board of Appeals’ order reflects this

finding, despite omission of the word “retirement”.

The taxation of disability retirement benefits, such as

those paid to petitioner under the ERS, requires examination of

sections 72, 104, and 105, and the regulations thereunder.
 - 11 -

Distributions from qualified plans such as the ERS are generally

treated as annuities and subject to tax to the extent provided in

section 72. Sec. 402(a). Section 72(a) generally requires any

amount received as an annuity to be included in gross income.

Section 72(b) allows an exclusion by permitting the use of an

exclusion ratio to except from gross income amounts proportionate

to the taxpayer’s investment in the contract. Section 72(c), as

relevant here, defines the investment in the contract to be the

aggregate amount of premiums or other consideration paid for the

contract (or in the instant case, petitioner’s after-tax basis).

As a general rule, section 72 does not apply to any amount

received as an accident or health benefit. Sec. 1.72-15(b),

Income Tax Regs. Amounts received as a result of a disability

are accident or health benefits within the meaning of section

1.72-15, Income Tax Regs. Accident or health benefits may be

excluded from gross income if such income satisfies specific

requirements set forth in either section 104 or 105. Section

104(a), in relevant part, excludes from gross income certain

amounts received as compensation for injuries or sickness

described in paragraphs (1) through (3) of that section.11

Section 105(a) includes in gross income certain amounts received

11
Par. (4) of sec. 104(a), which applies to taxpayers who
have served in the armed forces or certain other organizations,
and par. (5), which applies to victims of terrorist attacks, are,
on their face, inapplicable to the facts before us.
 - 12 -

under accident and health plans for personal injuries or

sickness.

2. Section 104(a)(1)

Section 104(a)(1) excludes from gross income “amounts

received under workmen’s compensation acts as compensation for

personal injuries or sickness”. The regulations provide that

section 104(a)(1) includes “a statute in the nature of a

workmen’s compensation act which provides compensation to

employees for personal injuries or sickness incurred in the

course of employment.” Sec. 1.104-1(b), Income Tax Regs. A

statute that conditions eligibility for benefits on the existence

of a work-related injury or sickness may qualify as a workers’

compensation act for purposes of section 104 even though those

benefits are called “disability retirement benefits.” Take v.

Commissioner, 804 F.2d 553, 557 (9th Cir. 1986), affg. 82 T.C.

630 (1984). However, section 104(a)(1) “does not apply to a

retirement pension or annuity to the extent that it is determined

by reference to the employee’s age or length of service * * *

even though the employee’s retirement is occasioned by an

occupational injury or sickness.” Sec. 1.104-1(b), Income Tax

Regs. The relevant inquiry is into the nature of the statute

pursuant to which the payment is made and not the source of the

particular taxpayer’s injury. Rutter v. Commissioner, 760 F.2d

466, 468 (2d Cir. 1985), affg. T.C. Memo. 1984-525. If the
 - 13 -

statute does not qualify, the fact that the taxpayer’s injury was

in fact work related is irrelevant. Id.

The ordinary disability retirement benefit awarded to

petitioner by the Board of Appeals under Baltimore County Code

section 23-53 (1988), does not restrict disability payments to

cases of work-related injury or sickness; rather, such retirement

benefits are available under that section to any member who has

had 5 or more years of creditable service, provided such member

meets the other requirements regarding incapacitation. Ordinary

disability retirement benefits under Baltimore County Code

section 23-53 (1988), are thus determined by reference to a

member’s length of service, not by reference to an injury

occurring on the job. See sec. 1.104-1(b), Income Tax Regs.

Accordingly, the ordinary disability retirement benefits received

by petitioners in taxable year 2000 do not qualify for the

exclusion from gross income provided in section 104(a)(1).

3. Section 104(a)(2)

Section 104(a)(2) excludes from gross income “the amount of

any damages * * * received (whether by suit or agreement and

whether as lump sums or as periodic payments) on account of

personal physical injuries or physical sickness”. “The term

‘damages received (whether by suit or agreement)’ means an amount

received (other than workmen’s compensation) through prosecution

of a legal suit or action based upon tort or tort type rights, or
 - 14 -

through a settlement agreement entered into in lieu of such

prosecution.” Sec. 1.104-1(c), Income Tax Regs. Thus, the

exclusion must derive from some sort of tort claim against the

payor. Rickel v. Commissioner, 900 F.2d 655, 658 (3d Cir. 1990),

affg. in part and revg. in part on other grounds 92 T.C. 510

(1989).

The ERS provisions of the Baltimore County Code provide for

a “general system of pensions and retirements for the benefit and

advantage of its officers, agents, servants, and employees” of

Baltimore County. Baltimore County Code sec. 23-1 (1988). Thus,

the ordinary disability retirement benefits provided under the

ERS are not payments derived from some sort of tort claim against

Baltimore County. See, e.g., Flaherty v. Commissioner, T.C.

Memo. 1987-61 (Internal Revenue Service employee’s disability

retirement annuity payments received under the Civil Service

Retirement System were not excludable under section 104(a)(2)

because the payments were intended to provide for the physical

and mental well-being of the employee and were not damages from

the settlement or prosecution of a legal suit). Accordingly,

section 104(a)(2) does not apply to exclude from gross income the

ordinary disability retirement benefits received by petitioners

in taxable year 2000.
 - 15 -

4. Sections 104(a)(3) and 105

Section 104(a)(3) generally excludes from gross income

amounts received by an employee through employer-provided

accident or health insurance for personal injuries or sickness,

except to the extent such amounts are attributable to employer

contributions which were not includable in the gross income of

the employee. Section 105(a) is essentially the mirror image of

section 104(a)(3), and, subject to two exceptions, includes in

gross income of an employee those amounts not excluded under

section 104(a)(3).

In the instant case, petitioner contributed a percentage of

his salary to the ERS on an after-tax basis prior to October 1,

1989, and on a pre-tax basis thereafter. The ERS calculated the

nontaxable portion of petitioner’s taxable year 2000 ordinary

disability retirement benefits attributable to his after-tax

contributions to be $255, and respondent has allowed petitioners

to exclude this amount from gross income. The remaining portion

of petitioner’s ordinary disability retirement benefits is

attributable to contributions by Baltimore County that were not

included in petitioner’s gross income, and to “pick up”

contributions under section 414(h)(2) made by Baltimore County

that were treated as employer contributions and not included in

petitioner’s gross income. Accordingly, petitioners are not

entitled to exclude under section 104(a)(3) the remaining portion
 - 16 -

of the ordinary disability retirement benefits received from the

ERS in taxable year 2000.12

Section 105 provides two exceptions to includability even

for amounts attributable to employer contributions or payments

that were not includable in an employee’s gross income. Section

105(b) provides an exclusion for amounts paid by an employer to

the taxpayer to reimburse the taxpayer for expenses for medical

care. Medical expense reimbursements are not at issue in this

case, so the exception in section 105(b) does not apply. Section

105(c) excludes from gross income amounts attributable to

12
Respondent argues that petitioner’s ordinary disability
retirement benefits are not excludable under sec. 104(a)(3)
because there is no evidence that the source of the benefits was
accident or health insurance or an arrangement having the effect
of accident or health insurance. We note, in this regard, that
for purposes of secs. 104 and 105, amounts received under an
accident or health plan for employees, as well as amounts
received from a sickness and disability fund for employees
maintained under State law, are treated as received through
accident or health insurance. Sec. 105(e); secs. 1.104-1(d),
1.105-5(a), Income Tax Regs.; see also Berman v. Commissioner,
925 F.2d 936, 938-939 (6th Cir. 1991), affg. T.C. Memo. 1989-654
(a plan subject to sec. 105 may be encapsulated in a qualified
retirement plan); Trappey v. Commissioner, 34 T.C. 407 (1960)
(disability retirement income paid under the District of Columbia
Teachers' Retirement Act was received through accident or health
insurance for personal injuries or sickness within meaning of
sec. 104(a)(3)). However, because the remaining portion of
petitioner’s ordinary disability retirement benefits as
determined by respondent would be includable in petitioners’
gross income, on the record before us, under either sec. 72 or
105(a), it is not necessary for us to decide whether the ERS
would be treated as accident or health insurance, and we limit
our decision to a conclusion that, assuming arguendo that the
benefits received by petitioner from the ERS were received
through health or accident insurance, they are includable in
gross income under sec. 105(a).
 - 17 -

employer contributions to the extent such amounts (1) constitute

“payment for the permanent loss or loss of use of a member or

function of the body, or the permanent disfigurement” of the

taxpayer, and (2) are computed “with reference to the nature of

the injury without regard to the period the employee is absent

from work.” Courts have interpreted section 105(c) to exclude

payments from gross income only if the plan or contract under

which such payments are made varies the amount of the payments

according to the type and severity of the injury suffered by the

employee. Rosen v. United States, 829 F.2d 506, 509-510 (4th

Cir. 1987); Beisler v. Commissioner, 814 F.2d 1304, 1307 (9th

Cir. 1987), affg. en banc T.C. Memo. 1985-25.

Under the ERS, computation of an ordinary disability

retirement allowance does not vary with the nature of the injury,

as required by section 105(c)(2); instead, all members found to

be incapacitated and entitled to ordinary disability retirement

benefits receive an allowance in the form of an annuity

equivalent to a member’s accumulated contributions at the time of

retirement, and a pension based on a formula involving a member’s

“average final compensation”. See Baltimore County Code secs.

23-53, 23-54 (1988). Accordingly, section 105(c) does not apply

to exclude from gross income the ordinary disability retirement

benefits received by petitioners in taxable year 2000.
 - 18 -

C. Conclusion

Based on the foregoing, petitioners are not entitled to

exclude from gross income the ordinary disability retirement

benefits they received from the ERS in taxable year 2000 in

excess of the amount determined by respondent. Accordingly, we

hold that the ordinary disability retirement benefits received by

petitioners in taxable year 2000, in the amount determined by

respondent, constitute gross income.

Issue 2. Catherine E. France’s Wages for Taxable Year 2000

Petitioner Catherine E. France received a Form W-2, Wage and

Tax Statement, from Jos. A. Bank Clothiers, Inc., for taxable

year 2000 reflecting wages of $4,525.80. Box 3 of the Form W-2

reflected Social Security wages of $5,262.69. Petitioners

reported the latter amount, $5,262.69, on their 2000 Form 1040.

Respondent acknowledges that petitioners overstated the amount of

taxable wages received by Catherine E. France from Jos. A. Bank

Clothiers, Inc., and the parties stipulate that the correct

amount for taxable year 2000 is $4,525. Based on this, we hold

that petitioners’ taxable year 2000 wage income is to be reduced

in the amount of $737.

Issue 3. Taxable Year 1997

Respondent issued a notice of deficiency for taxable year

2000 to petitioners on November 25, 2002. Petitioners submitted

a document to the Court on February 24, 2003, which the Court
 - 19 -

filed as petitioners’ petition. The document requested a

“redetermination of the taxable income in question, to Larry J.

France from Baltimore County Employees Retirement System,” but

did not reference a specific tax year. The document did

reference enclosed “copies of IRS Notice of Deficiency”, but the

only attachment to the document was the notice of deficiency,

dated November 25, 2002, for taxable year 2000.

The document submitted by petitioners did not comply with

the rules of the Court as to the form and content of a proper

petition, nor was the filing fee paid. See Rule 173(a). The

Court ordered petitioners to file a proper amended petition and

pay the filing fee by May 2, 2003.13

Petitioners timely filed an amended petition with the Court

and paid the filing fee. In the amended petition, petitioners

disputed deficiencies determined for taxable years 1997 and 2000,

and they attached a notice of proposed changes (Form CP-2000),

issued by respondent on June 9, 1999, proposing an increase to

petitioners’ 1997 taxable income. The income at issue for

taxable year 1997 was the same as that at issue for taxable year

2000; specifically, the pension income received by petitioner

pursuant to the provisions of the ERS.

13
The form and style of papers filed with the Court must
comply with requirements set forth in Rule 23, and the Court may
return any paper that does not conform to the requirements of the
Rule. Rule 23(g).
 - 20 -

At trial, respondent stated that a notice of deficiency for

taxable year 1997 had been issued to petitioners on November 17,

1999. Petitioner testified that petitioners had paid off the tax

liability determined in the notice of deficiency for taxable year

1997, and respondent acknowledged that his records indicated that

petitioners’ 1997 tax liability had been fully paid after the

notice of deficiency was issued to petitioners.

This Court is a court of limited jurisdiction, and we may

exercise our jurisdiction only to the extent authorized by

Congress. Sec. 7442; Trost v. Commissioner, 95 T.C. 560, 565

(1990). Our jurisdiction to redetermine a deficiency is

dependent on the issuance of a valid notice of deficiency and the

timely filing of a petition. Secs. 6212, 6213; Rule 13(a), (c).

To be timely, a petition must generally be filed within 90 days

of the date the notice of deficiency is issued by the

Commissioner. If a petition is not filed within the 90-day

period, this Court does not acquire jurisdiction of the case.

Cataldo v. Commissioner, 60 T.C. 522 (1973), affd. per curiam 499

F.2d 550 (2d Cir. 1974).

In the instant case, the notice of deficiency for taxable

year 1997 was issued to petitioners on November 17, 1999, and the

petition was filed on February 24, 2003, clearly outside the 90-

day period required by section 6213. In addition, the tax

deficiency determined by respondent for taxable year 1997 has
 - 21 -

been fully paid by petitioners. Petitioners’ attempt to add

taxable year 1997 to the instant case by way of their amended

petition, although understandable in light of the identity of the

issues, does not confer jurisdiction on this Court with respect

to that year. We find that we do not have jurisdiction over

petitioners’ 1997 taxable year. The Court, on its own motion,

will dismiss and strike taxable year 1997 for lack of

jurisdiction.

Reviewed and adopted as the report of the Small Tax Case

Division.

To reflect the foregoing,

An appropriate order will be

issued, and decision will be entered

under Rule 155.