                        T.C. Summary Opinion 2007-72



                          UNITED STATES TAX COURT



            E. JOAN BIRKEY AND LARRY E. BIRKEY, Petitioners v.
               COMMISSIONER OF INTERNAL REVENUE, Respondent



        Docket No. 6392-05S.                Filed May 9, 2007.



        E. Joan Birkey and Larry E. Birkey, pro sese.

        Catherine Tyson, for respondent.



        FOLEY, Judge:    This case was heard pursuant to section 74631

of the Internal Revenue Code.       Pursuant to section 7463(b), the

decision to be entered is not reviewable by any other court, and

this opinion shall not be treated as precedent for any other

case.       The issue for decision is whether petitioners failed to



        1
       Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
                                - 2 -

report income relating to 2002.

                              Background

     In 2002, petitioners received interest income from three

banks.   In addition, on December 6, 2002, Ms. Birkey received

$40,433 from her Keogh account (i.e., a qualified retirement plan

for self-employed individuals).    On that same day, Ms. Birkey

used those funds to purchase U.S. Savings Bonds.       Petitioners, on

their 2002 joint Federal income tax return, did not include in

gross income the interest income and the distribution from the

Keogh account.

     On January 24, 2005, respondent sent petitioners a notice of

deficiency relating to 2002.    Respondent determined that

petitioners failed to report the interest income and the

distribution from the Keogh account.       On April 5, 2005,

petitioners, while residing in Osage Beach, Missouri, filed their

petition with the Court.

                              Discussion

     Pursuant to section 61(a)(4), interest income is included in

gross income.    Pursuant to section 72, amounts distributed from a

Keogh account are included in gross income in the year of

receipt.   See sec. 402(a).   Petitioners contend that purchasing

U.S. Savings Bonds with the distribution from the Keogh account

is a “qualified rollover” (i.e., the distribution would not be

includable in their gross income).      No such exception exists.
                                 - 3 -

Sec. 402(c)(1); Lemishow v. Commissioner, 110 T.C. 110, 112

(1998).   Accordingly, respondent’s determinations are sustained.2

     Contentions we have not addressed are irrelevant, moot, or

meritless.

     To reflect the foregoing,


                                             Decision will be entered

                                         for respondent.




     2
       Sec. 7491(a) is inapplicable because petitioners failed to
introduce credible evidence within the meaning of sec.
7491(a)(1).
