1 Section references are to the Internal Revenue Code in

effect for the year at issue, and Rule references are to the Tax

Court Rules of Practice and Procedure.

T.C. Memo. 1997-373

UNITED STATES TAX COURT

JOHNNIE EVERAGE, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 2752-97. Filed August 18, 1997.

Johnnie Everage, pro se.

Steven R. Guest, for respondent.

MEMORANDUM OPINION

POWELL, Special Trial Judge: This case was heard pursuant

to the provisions of section 7443A(b)(3) and Rules 180, 181, and

182.1
- 2 -

Respondent determined a deficiency in petitioner's 1994

Federal income tax in the amount of $1,820. Petitioner resided

in Milwaukee, Wisconsin, at the time the petition was filed.

The only issue is whether Social Security benefits received

by petitioner in 1994 in the amount of $6,511 are includable in

gross income.

The facts may be summarized as follows. Petitioner was

employed by the U.S. Postal Service until 1988. In that year, he

was retired. Petitioner did not receive a pension at that time. 

In 1991, petitioner started drawing Social Security benefits. In

1994, petitioner was awarded a pension from the Postal Service

and received a lump-sum payment in the amount of $34,853 for his

pension from 1988. During 1994, petitioner also received $7,909

in Social Security benefits. 

On his 1994 Federal income tax return, petitioner reported

the $34,853 received from the Postal Service. He did not report

any income from the Social Security Administration. Upon

examination of that return, respondent determined that $6,511 of

the Social Security benefits should have been included in gross

income.

Petitioner and respondent agree that petitioner received 

$34,853 from the Postal Service and that of that amount $33,053

is includable in gross income. Petitioner does not dispute that

he received $7,909 from the Social Security Administration, but
- 3 -

he contends that the Social Security benefits are not includable

in gross income.

Section 86 governs the taxability of Social Security

benefits. That section, which is complex and cannot be parsed

easily, provides in relevant part:

(a) In General.--

(1) In general.--Except as provided in paragraph

(2), gross income for the taxable year of any taxpayer

described in subsection (b) (notwithstanding section

207 of the Social Security Act) includes social

security benefits in an amount equal to the lesser of--

(A) one-half of the social security

benefits received during the taxable year, or

(B) one-half of the excess described in

subsection (b)(1).

(2) Additional amount.--In the case of a

taxpayer with respect to whom the amount

determined under subsection (b)(1)(A) exceeds the

adjusted base amount, the amount included in gross

income under this section shall be equal to the

lesser of--

(A) the sum of--

(i) 85 percent of such excess, plus

(ii) the lesser of the amount

determined under paragraph (1) or an

amount equal to one-half of the

difference between the adjusted base

amount and the base amount of the

taxpayer, or

(B) 85 percent of the social security

benefits received during the taxable year.

(b) Taxpayers to Whom Subsection (a) Applies.--
- 4 -

(1) In general.--A taxpayer is described in this 

subsection if--

(A) the sum of--

(i) the modified adjusted gross

income of the taxpayer for the taxable

year, plus

(ii) one-half of the social

security benefits received during the

taxable year, exceeds

(B) the base amount.

(2) Modified adjusted gross income.--For

purposes of this subsection, the term “modified

adjusted gross income” means adjusted gross

income--

(A) determined without regard to this

section and sections 135, 911, 931, and 933,

and

(B) increased by the amount of interest

received or accrued by the taxpayer during

the taxable year which is exempt from tax.

(c) Base Amount and Adjusted Base Amount.-- For 

purposes of this section--

(1) Base amount.--The term “base amount”

means--

(A) except as otherwise provided in this

paragraph, $25,000,

(B) $32,000 in the case of a joint return,

and

(C) zero in the case of a taxpayer who--

(i) is married as of the close of the

taxable year (within the meaning of section

7703) but does not file a joint return for

such year, and
- 5 -

2 The difference is due to rounding.

(ii) does not live apart from his

spouse at all times during the taxable year.

(2) Adjusted base amount.--The term “adjusted

base amount” means--

(A) except as otherwise provided in this

paragraph, $34,000,

(B) $44,000 in the case of a joint return,

and

(C) zero in the case of a taxpayer described

in paragraph (1)(C).

Petitioner's adjusted gross income and modified adjusted

gross income are the same--$33,053. His "base amount" was

$25,000. Sec. 86(c)(1)(A). His "adjusted base amount" is

$34,000. Sec. 86(c)(2)(A). Under section 86(b)(1) petitioner's

modified adjusted gross income ($33,053) plus one-half of the

Social Security benefits ($3,955) totaling $37,008 exceeds the

"adjusted base amount" of $34,000. Accordingly, under section

86(a)(2) the amount of the Social Security benefits to be

included in petitioner's gross income is equal to the lesser of

$6,512 (the sum of 85 percent of the excess of $3,008 ($37,008

less $34,000) or $2,557 plus the lesser of $4,500 which is onehalf of the difference between the "adjusted base amount"

($34,000) and the "base amount" ($25,000) or one-half of the

benefits received ($3,955)), or 85 percent of the Social Security

benefits ($7,909) or $6,723. Respondent included $6,511 in gross

income.2
- 6 -

Petitioner does not dispute the accuracy of respondent's

calculation. Rather, petitioner argues that, if he had, as he

should have, received the payments from the Postal Service

ratably over the years for which they were paid (1988 to 1994),

he would have paid no tax on the Social Security benefits

received in 1994 because his income would not have exceeded

either the "base amount" or the "adjusted base amount". Thus,

the "bunching" of the Postal Service income produces this

anomalous situation.

Petitioner's chagrin and frustration may be understandable. 

Nonetheless, we must apply the statutes as Congress wrote them

and we do not have the power to rewrite section 86 to avoid this

anomaly. See Huntsberry v. Commissioner, 83 T.C. 742, 747-748

(1984). Unfortunately for petitioner Congress did not ameliorate

the effect of the "bunching" of income from other sources when it

enacted section 86. Accordingly, respondent's determination must

be sustained.

Decision will be entered

for respondent.