In Uncategorized on 05/27/2016 at 15:59

It’s getting late on a Friday afternoon, and even IRS E-Services’ Transcript Delivery System, TIN Matching and e-file Application is shutting down for the weekend. But there’s one last designated hitter to blog before I head off for a piña colada.

Joseph N. Ryan, Docket No. 13473-15L, filed 5/25/16, got a letter from Social Security Administration that would lighten any old-timer’s heart. “”Recently I discovered a sentence in my Social Security award letter -(copy enclosed, with the sentence highlighted), stating that I may keep ALL of my benefits – no matter how much I earn.” Order, at p. 2.

Well, Joe never paid tax, and didn’t petition the SNOD. When Joe got the NITL, he asked for a CDP, and was told that, although he can keep it, it’s still taxable.

STJ Armen, The Judge With a Heart, gives Joe the bad news.

“…it is clear that his argument is unavailing because he misunderstands the meaning of the Social Security benefit statement that he so heavily relies on. The statement deals only with what happens when a worker continues to work while receiving Social Security benefits. In other words, depending on a worker’s age, the worker’s Social Security benefits may be reduced if the worker earns above a prescribed amount; however, after attaining a certain age a worker will receive the worker’s full benefit regardless of the amount earned. In short, the Social Security benefit statement that petitioner relies on has nothing to do with the taxability of Social Security benefits; indeed, the word ‘tax’ or ‘taxable’ does not even appear. Rather, section 86 of the Internal Revenue Code determines the extent to which Social Security benefits may be taxable.” Order, at p. 5.

Sorry, Joe, you have to pay tax on Social Security. Welcome to the club.

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