IRA Distributions Includible in Income.

The petitioners are a married couple.  The husband was the sole beneficiary of his father's IRA.  He elected a lump sum option upon his father's death, and issued checks to both of his siblings totaling $37,000 based on what he thought his father wanted.  The payment was made out of the distribution that the husband had received in the previous months.  The petitioners filed a return for the year at issue but did not report the IRA distributions in income.  The IRS issued a deficiency notice for over $27,000 plus a penalty in excess of $5,000.  The court upheld the IRS position.  Morris v. Comr., T.C. Memo. 2015-82.