James E. Brown - Page 12

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               The rule announced by the Supreme Court in United States v.            
          Burke, supra, must, therefore, be given full retroactive effect             
          to any open cases.  Accordingly, the $137,918.96 of backpay                 
          petitioner received as partial settlement of the Title VII claim            
          is taxable income for 1990.                                                 
          Issue 3.  Withholding Credits                                               
               Respondent determined that petitioner is not entitled to               
          additional withholding credits of $47,277 for 1991.  Petitioner             
          asserts that he is entitled to an overpayment based on his claim            
          to such withholding credits.                                                
               This adjustment originates from an information item reported           
          to the IRS.  Specifically, the IRS received information that a              
          Form W-2 was issued to petitioner by the District Court                     
          reflecting an additional $81,669 of income and withholding                  
          credits of $47,277 in further satisfaction of his Title VII                 
          claim.  Upon further review, it was discovered that the Form W-2            
          was not issued by the District Court and was not a bona fide                
          document.  Respondent concedes that petitioner did not receive              
          the additional $81,669.  Furthermore, the District Court did not            
          remit $47,277 to the IRS on behalf of petitioner.                           
               For purposes of additional income, petitioner accepts that             
          the District Court did not issue the Form W-2 and that he did not           
          receive the $81,669.  Notwithstanding this, petitioner asserts              
          that he is still entitled to the $47,277 of withholding credits             





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