- 16 -
petitioners' argument on this point, and we note that they
did not call the seller's physician as a witness in this
case.
Petitioners also argue as follows:
Further, where the tax positions of the parties
to a contractual transaction are antithetical,
courts have been loath to look behind the
contract. Hamlin's Trust v. Comm., 54-1 U.S.T.C.
�9215, 209 F.2d 761 (10th Cir. 1954). This is
due in no small measure to the fact that the
presumed tax consequences likely effect (sic) the
economic bargain between the parties. In Joan C.
Clesceri v. United States, 79-2 U.S.T.C. �9738
(U.S.D.C. No. Dist. Ill. 1979), an allocation to
a covenant not to complete (sic) in an agreement
for the sale of a refuse business was held to be
binding for tax purposes even when the selling
party was aware he was terminally ill when the
contract was entered into.
The cases cited by petitioners are not applicable to this
case. In both of those cases, the taxpayers, rather than
the Commissioner, sought to vary the terms of an agreement.
In each case, the taxpayer reported the proceeds of the
sale of stock or the sale of business assets as allocable
entirely to the stock or to the assets, contrary to an
agreement with the buyer under which a portion of the
proceeds was allocated to a covenant not to compete.
Hamlin's Trust v. Commissioner, 209 F.2d 761, 762-763
(10th Cir. 1954), affg. 19 T.C. 718 (1953); Clesceri v.
United States, 45 AFTR 2d 80-634, 79-2 USTC par. 9738 (N.D.
Ill. 1979). In each case, the court held the taxpayer to
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011