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rejected petitioner's offer. Burke’s estate filed Federal income
tax returns treating the payments from INI as payments pursuant
to the buy-sell agreement.
By letter dated July 7, 1988, petitioner proposed a
settlement under which he would amend his returns to show INI's
payments to the estate as bonus income to himself. Furthermore,
under petitioner’s proposed settlement, the estate would accept
$25,176, plus interest, as payment in full for Burke's stock.
The form of agreement prepared by petitioner was never signed,
but the estate negotiated a check from petitioner in the amount
of $15,176 bearing the notation that it was in full settlement of
any claims against INI or petitioner, exclusive of tax, interest,
or penalties arising from the stock purchase or petitioner's
conduct.4
Ultimately, Burke's estate was paid $150,029. INI made
payments totaling $90,741 to Burke’s estate and Burke’s
creditors. Petitioner made payments to the estate in the amount
of $57,676, and rendered legal services to Thorpe on a personal
matter for which petitioner would have charged $1,612. Only one
of the checks in evidence bears a notation that it was a payment
on the stock purchase. No check bears a notation that it was a
payment on the bonus.
4 In addition to the $15,176 check, petitioner endorsed to
the estate a check payable to petitioner, drawn on INI’s account,
in the amount of $10,000.
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