James E. Brown - Page 4

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               On his Federal income tax return for 1990, petitioner                  
          reported that he received an award based on the Title VII claim,            
          but assumed the position that it was not taxable.  Petitioner's             
          1990 return was first received at respondent's Brookhaven Service           
          Center on July 1, 1992 and forwarded to the Philadelphia Service            
          Center for processing.  A second return for 1990, which                     
          respondent treated as an amended return, was received on July 6,            
          1992 at the Philadelphia Service Center.  In September 1992                 
          petitioner received a refund of $30,045.66 for 1990.                        
               Respondent then received an information item for 1991                  
          indicating that a Form W-2 was issued to petitioner by the                  
          District Court.  The Form W-2 indicated that for 1991 petitioner            
          had received additional income of $81,669 and withholding credits           
          of $47,277 in further satisfaction of the Title VII claim.  Upon            
          further review, however, the Form W-2 was found not to be a bona            
          fide document, and the parties agreed that petitioner did not               
          receive an additional $81,669 of income.                                    
               On April 7, 1994, petitioner filed a complaint in the U.S.             
          Court of Federal Claims (the Court of Federal Claims) seeking to            
          recover the amount allegedly paid to him in 1991 and the amount             
          allegedly withheld for that year.  On May 12, 1995, after                   
          petitioner filed suit in the Court of Federal Claims, respondent            
          issued the notice of deficiency for 1990 and 1991.  In response             
          to the notice of deficiency, petitioner filed a petition with the           





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