As it turns out, it was something really simple.... My script wasn't working because I didn't have the input file saved as the correct format. I created my txt file in excel (office for Macs 2011) and saved it as a tab delimited text file. This input did not make my script work. When I re-saved it as a Windows Formatted Text file, the script works great and my txt file is converted to fasta format no problem.

Thank you so much for your input everyone. It is appreciated.