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Respondent determined a deficiency of $7,197 in petitioner's
1989 Federal income tax and an accuracy-related penalty under
section 6662(a) in the amount of $1,439.40.
After concessions,2 the issues for decision are: (1)
Whether the proceeds of a settlement entered into between
petitioner and his former employer are excludable from income
under section 104(a)(2); (2) whether petitioner is liable for
self-employment tax under section 1401 with respect to such
proceeds; and (3) whether petitioner is liable for an accuracy-
related penalty for negligence or disregard of rules or
regulations pursuant to section 6662(a).
Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
herein by this reference. Petitioner resided in Danville,
California, at the time he filed his petition.
Background
From October 18, 1988, through February 27, 1989, petitioner
worked as an attorney for the legal department of American
Building Maintenance Industries, Inc. (hereinafter ABMI).
During the period of his employment, petitioner worked under
the supervision of the General Counsel to ABMI, Harry Kahn
2The parties have stipulated that, during the taxable year
at issue, petitioner: (1) Received dividend income in the amount
of $219.97, received interest income in the amount of $466.27,
and received additional capital gains in the amount of $282.03;
and (2) incurred ordinary and necessary business expenses in the
amount of $2,902.
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