United States v. Md. Savings-Share Ins. Corp. 400 U.S. 4, 6 (1970). This Court has consistently upheld the constitutionality of section 86. McAdams v. Commissioner, 118 T.C. 373, 379 (2002); Thomas v. Commissioner, T.C. Memo. 2001-120; Clark v. Commissioner, T.C. Memo. 1998-280, 76 T.C.M. (CCH) 219 (1998), aff'd without published opinion, 187 F.3d 641 (8th Cir. 1999); Roberts v. Commissioner, T.C. Memo 1998-172, aff'd without published opinion, 182 F.3d 927 (9th Cir. 1999). As discussed supra pp. 3-4, Congress enacted section 86 to more closely align the treatment of Social Security benefits and benefits under other retirement systems but also to protect lower earning taxpayers by establishing a "base amount."

Section 86(d) defines "social security benefit[s]" as "any amount received by the taxpayer by reason of entitlement to--(A) a monthly benefit under title II of the Social Security Act, or (B) a tier 1 railroad retirement benefit." Whether and to what extent Social Security benefits are included in a taxpayer's gross income (i.e., the taxable amount of Social Security benefits received) is calculated pursuant to a statutory formula set forth in section 86. Sec. 86(a)-(d); see McAdams v. Commissioner, 118 T.C. 373, 375-376 (2002). A taxpayer, however, may make a section 86(e) election if the taxpayer receives a lump-sum Social Security benefit, which is attributable to a prior year.

The taxability of Social Security benefits is calculated pursuant to a formula set forth in sec. 86. See McAdams v. Commissioner, 118 T.C. 373, 375-376 (2002). Under sec. 86, if a taxpayer's "modified adjusted gross income", plus one half of the Social Security benefits received during the taxable year, exceeds the "base amount", then a portion of the Social Security benefits received must be included in the taxpayer's gross income.

If a taxpayer's "modified adjusted gross income" plus one-half of the Social Security benefits received during the taxable year exceeds the "base amount", then a portion of the taxpayer's Social Security benefits is includible in gross income. Sec. 86(a)-(d); see also McAdams v. Commissioner, 118 T.C. 373, 375-376 (2002). The "base amount" is $32,000 in the case of a joint return.

If a taxpayer's "modified adjusted gross income" plus one-half of the Social Security benefits received during the taxable year exceeds the "base amount", then a portion of the taxpayer's Social Security benefits is includible in gross income. Sec. 86(a) through (d); see also McAdams v. Commissioner, 118 T.C. 373, 375-376 (2002). The "base amount" is $32,000 in the case of a joint return.