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liable for excess travel advances. Specifically, petitioner
commenced an action in the trial court, and, following the
dismissal of the action in January 1991, he appealed to the
Appellate Division. The Appellate Division ultimately affirmed
the trial court, but not until May 1992. Thus, petitioner's
dispute with the school district was not resolved in 1990, the
taxable year in issue.
Because there existed a genuine dispute between petitioner
and the school district in 1990 regarding petitioner's liability
for excess travel advances, it cannot be said that in 1990,
petitioner constructively received the net wages withheld by the
school district during that year. Cf. N. Sobel, Inc. v.
Commissioner, 40 B.T.A. 1263 (1939).
Respondent cites Tucker v. Commissioner, 69 T.C. 675 (1978),
Kuntz v. Commissioner, T.C. Memo. 1992-650, and Kasey v.
Commissioner, T.C. Memo. 1976-266, in support of her position.
As discussed below, respondent's reliance on these cases is
misplaced.
In Tucker v. Commissioner, supra, the taxpayer was a teacher
who engaged in an illegal strike against a school district. The
school district, acting pursuant to a State law that imposed a
monetary penalty on persons participating in illegal strikes,
withheld the penalty from the taxpayer's wages. We held that the
withholding of the penalty resulted in income to the taxpayer.
We based our holding on the fact that the taxpayer incurred a
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