T.C. Memo. 2001-224

UNITED STATES TAX COURT

IDA MAE WHITTAKER, Petitioner v.

COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 11433-00. Filed August 15, 2001.

Ida Mae Whittaker, pro se.

Sandra Veliz, for respondent.

MEMORANDUM OPINION

WOLFE, Special Trial Judge: Respondent determined a

deficiency of $1,241 in petitioner’s Federal income tax for 1998. 

The issue for decision is whether petitioner must include in her

gross income annuity payments received from her deceased
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1 Petitioner claimed an earned income credit on her 1998 tax

return. Her eligibility for the credit is a computational

matter.

husband’s former employer’s retirement plan.1 Petitioner’s

position is that she should not be subject to income tax on the

payments in question because her deceased husband’s Social

Security number (SSN), rather than her own, is listed on various

documents concerning the payments that she periodically received

from his former employer’s retirement plan. 

No written stipulation of fact was filed in this case. An

oral stipulation of fact was made at trial. The oral stipulation

of fact and the referenced exhibits identified in that

stipulation are incorporated herein by this reference. 

Petitioner resided in Tacoma, Washington, on the date the

petition was filed.

Petitioner was married to Denorise Whittaker (Mr. Whittaker)

until his death on October 4, 1995. Approximately 4 months

before his death, Mr. Whittaker retired from the Boeing Co.

(Boeing) effective June 1, 1995. As an employee of Boeing, Mr.

Whittaker participated in the Boeing Employee Retirement Plan

(plan). When he retired, Mr. Whittaker elected a 75-percent

joint and surviving spouse option, naming petitioner as his joint

annuitant under the plan. After Mr. Whittaker’s death,

petitioner became entitled to receive from the plan a benefit of

$815.13 per month for the remainder of her life. Pursuant to the
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2 Unless otherwise specified, all section references are to

the Internal Revenue Code in effect for the year in issue.

plan, during 1998 petitioner received a total of $9,781.56

($815.13 each month) by direct deposit from Boeing into a bank

account held by petitioner as trustee for her grandchild.

Petitioner received certain documents relating to the

retirement annuity payments that bore her name, yet listed her

deceased husband’s SSN rather than her own. Specifically,

Boeing’s retirement plan account statements, which were mailed to

petitioner twice each year, and the line on petitioner’s monthly

bank statements describing Boeing’s deposit both refer to Mr.

Whittaker’s SSN, rather than petitioner’s.

In addition, petitioner claims that Boeing sent her a 1998

Form W-2, Wage and Tax Statement, listing Mr. Whittaker’s SSN. 

However, petitioner did not attach a Form W-2 from Boeing to her

1998 Federal income tax return, nor did she produce a copy of

such a form at trial.

We consider it unlikely that Boeing sent petitioner a Form

W-2, because petitioner was not employed by Boeing. See sec.

6051; sec. 31.6051-1(a)(1)(i), Employment Tax Regs.2 As the

payor of a retirement annuity, Boeing was required to send

petitioner a Form 1099-R, Distributions From Pensions, Annuities,

Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts,

etc. Sec. 1.6041-1(a)(2), Income Tax Regs. The evidence here
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indicates that Boeing did in fact send petitioner a Form 1099-R. 

The Internal Revenue Service received a Form 1099-R from Boeing

that listed petitioner’s SSN and not Mr. Whittaker’s SSN.

Petitioner’s 1998 Federal income tax return was prepared at

a local church by VITA, an organization that petitioner believes

is associated in some way with Seattle University.

Petitioner claims she was told that the retirement benefits

she received from Boeing were not includable in her gross income

because the documents she presented listed an SSN that was not

her own. Petitioner argues that because her deceased husband’s

SSN, rather than her own, was listed on these documents, the

retirement benefits that she received from Boeing should be

excluded from her gross income. 

Gross income includes all income from whatever source

derived, unless otherwise specifically excluded. Sec. 61(a).

Annuities are specifically included in gross income. Secs.

61(a)(9), 72(a). Under section 72, amounts received as an

annuity generally are includable in the recipient’s gross income

except to the extent that they represent a reduction or return of

premiums or other consideration paid. Sec. 1.72-1(a), Income Tax

Regs.

Mr. Whittaker did not make any contributions to the plan. 

All contributions were made by Boeing. Therefore, the full

amount of each annuity payment is taxable.
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3 In Funk v. Funk, 598 P.2d 792, 794 (Wash. Ct. App. 1979),

the Washington Court of Appeals stated:

The doctrine of tentative trusts emerged from the oftquoted case of In Re Totten, 179 N.Y. 112, 125, 71 N.E.

748, 752 (1904), cited with approval in In Re Madsen’s

Estate, 48 Wash.2d 675, 678-79, 296 P.2d 518 (1956):

“A deposit by one person of his own money, in his own

name as trustee for another, standing alone, does not

(continued...)

Petitioner cannot avoid taxation of her annuity payments

merely because Boeing administrative personnel apparently 

mistakenly listed Mr. Whittaker’s SSN rather than petitioner’s

SSN on documents relating to payments made to her after Mr.

Whittaker’s death. The sweep of section 61 is very broad. Gross

income includes “instances of undeniable accessions to wealth,

clearly realized, and over which the taxpayers have complete

dominion.” Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431

(1955). Petitioner was entitled to the annuity payments at

issue, and they were properly deposited to a bank account under

her control. Petitioner has not shown that the annuity payments

fall within any provision of the Code or of other law exempting

or excluding them from gross income.

The bank account into which the funds were deposited appears

to be a so-called Totten trust account; that is, an account

belonging to the depositor with a beneficiary designated to

succeed to the funds only in the event of the depositor’s death. 

See Funk v. Funk, 598 P.2d 792, 794-795 (Wash. Ct. App. 1979).3
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3(...continued)

establish an irrevocable trust during the lifetime of

the depositor. It is a tentative trust merely,

revocable at will, until the depositor dies or

completes the gift in his lifetime by some unequivocal

act or declaration, such as delivery of the pass book

or notice to the beneficiary. In case the depositor

dies before the beneficiary without revocation, or some

decisive act or declaration of disaffirmance, the

presumption arises that an absolute trust was created

as to the balance on hand at the death of the

depositor.” * * *

Nothing in the record indicates that petitioner’s grandchild

owned any portion of the funds in the account. Instead, the

record clearly establishes that petitioner had full control over

the bank account. Copies of her bank statements show that

petitioner routinely withdrew funds for personal expenditures. 

The facts of this case establish that the income from the plan

was payable to petitioner and was paid to an account to which she

directed payment and over which she exercised complete control.

Petitioner’s reliance on the alleged mistaken advice of her

tax preparer also has no bearing on her tax liability. Such

reliance might be relevant if respondent had determined penalties

or additions to tax. See, e.g., Freytag v. Commissioner, 89 T.C.

849, 888 (1987), affd. 904 F.2d 1011 (5th Cir. 1990), affd. 501

U.S. 868 (1991); Dyckman v. Commissioner, T.C. Memo. 1999-79. 

But no penalties or additions to tax are in issue here. 

Petitioner is responsible for the deficiency in tax even though

she relied on erroneous advice. See United States v. Boyle, 469
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U.S. 241, 252 (1985); De Aycardi v. Commissioner, T.C. Memo.

1997-308 (“Reasonable reliance on an agent may constitute a

possible defense to penalties but not to the underlying tax.”).

To reflect the foregoing,

Decision will be entered

for respondent.