Michael G. Kroposki - Page 7

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                  Petitioner did not include the payment as an item of gross                          
            income in his 1993 Federal income tax return.  Respondent                                 
            determined a deficiency in tax on the basis that petitioner had                           
            omitted the payment as an item of gross income (described as                              
            “wages”) of $115,500.  Petitioner timely petitioned this Court,                           
            assigning error to respondent’s determination of a deficiency and                         
            averring in support of that assignment that the payment had been                          
            received in settlement of claims for defamation, fraud,                                   
            misrepresentation, emotional distress, and age discrimination                             
            related to petitioner’s wrongful discharge from the employ of                             
            Boehringer.  In the petition, petitioner concedes that any                                
            portion of the payment received in settlement of his claim of age                         
            discrimination is an item of gross income and that respondent did                         
            not err in adjusting his income accordingly.  Petitioner                                  
            describes the issue for decision as one of “apportionment”,                               
            apportioning the payment between “personal tortious injury” and                           
            the age discrimination claim.  Respondent denies both                                     
            petitioner’s assignment of error and the facts averred in support                         
            thereof.                                                                                  
                                             Discussion                                               
                  Gross income means all income from whatever source derived,                         
            unless excluded by law.  Sec. 61(a); sec. 1.61-1(a), Income Tax                           
            Regs.  Generally, compensation for services, including                                    
            termination or severance pay, is an item of gross income.  Sec.                           





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