Commissioner of Internal Revenue v. Charles R. And Irene Wilkerson

The Commissioner of Internal Revenue determined a deficiency in the 1961 income tax of Charles R. and Irene Wilkerson, in the amount of $204.56. Taxpayers petitioned the Tax Court for a redetermination of the deficiency. The Tax Court decided that there is no deficiency, its opinion being reported at 44 T.C. 718 . The Commissioner has petitioned this court to review that decision.

Charles R. Wilkerson retired from the United States Army on November 30, 1944, after more than thirty years’ service. In the joint income tax return filed by Wilkerson and his wife for the year 1961, they reported retirement pay in the amount of $3,199.68. In computing the retirement income credit authorized by section 37 of the Internal Revenue Code of 1954, 26 U.S.C. § 37 (1964), the taxpayers attributed one-half of the retirement pay, or $1,599.84, to Mrs. Wilkerson. This resulted in a credit of $204.56 attributed to the wife’s portion of the retirement pay and a credit of $240 attributed to Wilkerson’s portion, or a total retirement income credit of $444.56 for 1961.

In his deficiency determination the Commissioner ruled that the taxpayers were not entitled to that portion of the retirement income…