Don Laverne Clarke, pro se.

Anthony Hoefer

, for respondent.

MEMORANDUM FINDINGS OF FACT AND OPINION

ARMEN, Special Trial Judge

: This case was heard pursuant to the provisions of section 7443A(b)(3) and Rules 180, 181, and 182.¹

(...continued)

the Internal Revenue Code in effect for the taxable year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.

1402(a) provides that the term "net earning from self-employment" means the gross income derived by an individual from any trade or business carried on by such individual less any allowable deductions.

Section 1.219-1(c)(1), Income Tax Regs., defines compensation as wages, salaries, professional fees, or other amounts derived from personal services actually rendered but does not include amounts, such as interest and dividends, derived from or received as earnings or profits from property. See Miller v. Commissioner , 77 T.C. 97 (1981).

Petitioner contends that he received $7,893 of

"compensation" during 1993 consisting of an IRA distribution in the amount of $2,900, dividend income in the amount of $4,640, and capital gain in the amount of $353. In this regard, he contends that Congress did not intend to exclude dividend income, capital gain, and IRA distributions from the definition of "compensation" for purposes of section 219(a). Petitioner asserts that by using the term "includes" in the definition of "compensation" under section 219(f), Congress did not mean to exclude other unlisted sources of income, such as dividends or capital gain. He makes a similar contention with respect to the use of the term "means" in section 401(c)(2).

Petitioner's contentions were considered in Miller v. Commissioner , supra . In that case, the taxpayer claimed entitlement to an IRA deduction on the ground that income from his investment activity constituted "compensation" within the meaning of section 219. This Court held that capital gain, dividends, and interest income did not constitute "compensation" within the meaning of section 219. On the issue of statutory interpretation of the term "compensation", we stated: Finally, petitioner contends that when Congress used the word "includes" in sections 219(c)(1) and 401(c)(2)(C), it intended a broad interpretation of the statutes rather than a restrictive one. Apparently he is contending either that earned income is but one example of the many types of compensation covered by section 219(c)(1) or that the profits from his investments constitute "compensation" within the meaning of section 219 exclusive of section 219(c)(1). However, section 219(c)(1) was designed to include in the term "compensation" income earned by the self-employed individual, which, except for that provision, would be excluded from the definition of "compensation" under section 219. See H. Rept. 93-779, 1974-3 C.B. 244, 369. Thus, if the requirements of section 219(c)(1), which are in actuality the requirements of section 401(c)(2), are not satisfied, self-employment income will not be included in the term compensation. Similarly, section 401(c)(2)(C) was designed to include in the term "earned income"

earnings generated by property created by the taxpayer, e.g., the author or the inventor, which otherwise, depending upon the technical form of the transaction through which the income is earned, might have been excluded from that term. See S. Rept. 1707, 89th Cong., 2d Sess. (1966), 1966-2 C.B. 1059, 1103. [Fn. refs. omitted.]

Miller v. Commissioner

, supra at 103-104.

Petitioner contends that Miller v. Commissioner

, supra , is not applicable because the year in issue in that case, 1977, was different from the year in issue in his case. However, the statutory definition of "compensation" has not changed in any pertinent manner since 1977. Because Miller v. Commissioner , supra , interprets substantially identical statutory language, it lends precedential support to preclude entitlement to an IRA deduction based on investment income. Petitioner's compensation for the year in issue therefore does not include his capital gain and dividend income.

Similarly, the IRA distribution received by petitioner is not includable in his compensation. IRA distributions are not compensation as they do not constitute wages, salaries, professional fees, or other amounts derived from personal services actually rendered. Cf. Miller v. Commissioner , supra ;

sec. 1.219-1(c)(1), Income Tax Regs. Rather, they include amounts derived from earnings from property. Cf. sec. 1.2191(c)(1), Income Tax Regs. In essence, IRA distributions are nothing more than the distribution of principal plus dividends, capital gain, or other investment income earned on a tax deferred basis. See secs. 408(a), 72(a).

Further, by statute, the term "compensation" does not include any amount received as "a pension or annuity" or as "deferred compensation". See sec. 219(f)(1). An IRA provides opportunity for private pension coverage in the form of a trust created for the exclusive benefit of an individual or his beneficiaries. See sec. 408(a). To ensure that IRA proceeds are We now turn to some of petitioner's various other concerns. Petitioner has asked us to consider whether respondent properly determined the amount of interest imposed under section 6601. We are unable to address this issue. This Court is a court of limited jurisdiction, and we may exercise jurisdiction only to the extent expressly authorized by statute. See Judge v. Commissioner , 88 T.C. 1175, 1180-1181 (1987); Naftel v.

Commissioner

, 85 T.C. 527, 529 (1985). This Court's jurisdiction to redetermine a deficiency in tax generally does not extend to statutory interest imposed under section 6601. See Bax v. Commissioner , 13 F.3d 54, 56-57 (2d Cir. 1993), affg. an Order of this Court; LTV Corp. v. Commissioner , 64 T.C. 589, 597 (1975);

see also Asciutto v. Commissioner , T.C. Memo. 1992-564, affd. 26 F.3d 108 (9th Cir. 1994). Indeed, section 6601(e)(1) provides that interest prescribed by section 6601 is treated as a tax "except [for purposes of] subchapter B of chapter 63, relating to deficiency procedures". Because the effect of the parenthetical language of section 6601(e)(1) is to exclude interest from the definition of a "tax" for purposes of section 6211(a), it follows that such interest is not a deficiency. See White v. Commissioner , 95 T.C. 209, 213 (1990). We are therefore precluded in the context of a deficiency action from deciding whether respondent properly determined the amount of interest imposed under section 6601. But see sec. 7481(c) and Rule 261 regarding supplemental proceedings to redetermine interest on deficiencies on taxes; cf. sec. 6404(i) and Rules 280-284 regarding actions for review of failure to abate interest. Petitioner also contends that respondent erred in failing to reduce the "deficiency" by the $750 remitted by petitioner. We disagree.

The term "deficiency" is a technical term which is defined by the Internal Revenue Code. See section 6211(a). As relevant herein, a deficiency is the amount of income tax imposed by the Internal Revenue Code that exceeds the amount shown as the tax by the taxpayer on his return (if a return was filed). Thus, payments made by a taxpayer, such as the $750 payment, do not serve to reduce the "deficiency" within the meaning of section 6211(a). Cf. sec. 6211(b)(1). Parenthetically, we take note of the fact that respondent has acknowledged petitioner's $750 payment, and that such amount will serve to reduce pro tanto the amount of petitioner's ultimate out-of-pocket liability. Finally, petitioner has raised other arguments that we have considered in reaching our decision. To the extent that we have not discussed these arguments, we find them to be without merit. To reflect our disposition of the disputed issue, as well as petitioner's concessions, Decision will be entered for respondent .