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Respondent submitted to the Court a decision document (the
Document) that she claims is in accordance with the Stipulation.
By Order dated November 30, 1995, the Court directed petitioners
to respond to the Document. Petitioners allege in their response
that the 1984 self-employment tax shown in the Document is wrong.
Petitioners allege in their response that their 1984
self-employment income equals the $41,857 of receipts shown in
the Stipulation, less: (1) A $3,351 loss from Summit Equities,
(2) a $31,562 loss from Diamond Leasing, and (3) a $2,567 loss
from AIG Investors. Petitioners allege in their response that
Gregory Summers “rendered substantial personal services“ to these
three entities.
Discussion
The compromise and settlement of tax cases is governed by
general principles of contract law. A settlement stipulation is
in essence a contract. Each party agrees to concede some rights
which he or she may assert against his or her adversary as
consideration for those secured in the settlement agreement.
Saigh v. Commissioner, 26 T.C. 171, 177 (1956). Like contracts,
stipulations of settlement bind the parties thereto to the terms
thereof. Stamos v. Commissioner, 87 T.C. 1451, 1455 (1986). In
determining the proper meaning of the terms, we look to the
language of the stipulation and the circumstances surrounding its
execution. Robbins Tire & Rubber Co. v. Commissioner, 52 T.C.
420, 435-436 (1969); see also Brink v. Commissioner, 39 T.C. 602,
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