- 7 - out of his employment or severance thereof. All such claims are forever barred by this AGREEMENT regardless of the forum in which such claim(s) might be brought. * * * The parties expressly acknowledge that this AGREEMENT is intended to include all claims which FOSTER does not know or expect to exist in his favor at the time of execution of this AGREEMENT which claims are hereby extinguished. * * * Pursuant to the terms of the agreement, petitioner received payments from ABMI totaling $20,000 during the taxable year 1989. On or about January 15, 1990, ABMI issued to petitioner an Internal Revenue Service (IRS) Form 1099-MISC, which reported nonemployee compensation paid to him in the amount of $20,000 for 1989. Petitioner reported the $20,000 settlement received as "Gross receipts or sales" on Schedule C of his 1989 Federal income tax return. He claimed as an offset against this amount a deduction for "PERSONAL INJURY SETTLEM [sic]" in the amount of $15,000. This deduction was claimed to reflect the judgment of petitioner's accountant that $5,000 of the settlement was attributable to lost wages, and that $15,000 was attributable to tort like claims excludable under section 104(a)(2). Petitioner now claims, however, that his method of reporting the settlement was erroneous, and that the entire amount received should have been excluded from income under section 104(a)(2). Exclusion of Settlement Proceeds Respondent determined in the notice of deficiency that no part of the $20,000 settlement was excludable from petitioner'sPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011