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The IRS based their decision whether your disability benefits
are taxable or not - on how these benefits are reported by the payer.
The payer most likely reported these payments as taxable - and that is why the IRS assessed additional tax liability
Most likely - you received form
your disability benefits for 2013. If you are not able to locate that form - you may either contact a payer asking for duplicate or request your tax account transcript from teh IRS and verify that reporting.
Another issue - if the payer correctly reported these disability benefits as taxable.
If you retired on disability, you must include in income any disability pension
you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on line 7 of Form 1040
or Form 1040A
until you reach minimum retirement
age. Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled.
Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A.
Certain military and government
disability pensions are not taxable. You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance
injury or sickness resulting from active service in one of the following government services.
•The armed forces of any country.
•The National Oceanic and Atmospheric Administration
•The Public Health Service.
There are certain conditions for exclusion.
So - please verify if your disability benefits are based on personal injury or sickness resulting from active government services listed above.
Let me know if you need any clarification this matter.
I am here to help you with all tax related issues.