T.C. Memo. 1997-403
UNITED STATES TAX COURT
MELVIN J. LANEY AND CAROLYN A. LANEY, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24510-90. Filed September 11, 1997.
Petitioners (Ps) claimed on the Schedule C of
their 1983 tax return a $16.3 million “theft/casualty”
loss. Ps carried forward this loss as a net operating
loss to their 1986, 1987, and 1988 tax returns. Ps
contend they are entitled to the claimed deductions,
even if the deductions are not otherwise allowable,
because of a settlement agreement with the Department
of Justice in connection with a suit in the Court of
Claims. Ps also contend that they had a binding
settlement agreement with the Internal Revenue Service
in the instant case, allowing a net operating loss of
more than $0.5 million.
1. Held: Ps did not have a settlement agreement
with either the Department of Justice or the Internal
Revenue Service.
2. Held, further, Ps are not entitled to loss
carryover deductions on account of theft, casualty, or
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