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Commissioner, 102 T.C. 406, 438 (1994); Major v. Commissioner, 76
T.C. 239, 247 (1981).
We shall, however, apply the Danielson rule5 if the Court of
Appeals to which the case is appealable would do so. See Lardas
v. Commissioner, 99 T.C. 490, 498 (1992); Golsen v. Commissioner,
54 T.C. 742, 757 (1970), affd. 445 F.2d 985 (10th Cir. 1971);
Lang v. Commissioner, T.C. Memo. 1993-474. Because the Court of
Appeals for the Ninth Circuit, the Court of Appeals to which this
case is appealable, has not explicitly adopted the Danielson
rule, see Schmitz v. Commissioner, 51 T.C. 306, 315-316 (1968),
affd. sub nom. Throndson v. Commissioner, 457 F.2d 1022, 1025
(9th Cir. 1972), we shall apply the “strong proof” rule.
The basis for petitioners’ alternative contention is that
the $151,000 reported as income on their 1993 joint Federal
income tax return represented artificial income and should not be
charged to Haas as income.
Respondent contends that petitioners have not presented
strong proof to overcome the treatment in the separation
agreement by Haas, Petrie, and DP of the $151,000 as ordinary
income to Haas.
5 Under the Danielson rule, a party may seek to alter the
terms of an agreement only by adducing proof which in an action
between the parties to the agreement would be admissible to alter
the agreement or to show its unenforceability because of mistake,
undue influence, fraud, duress, etc. See Commissioner v.
Danielson, 378 F.2d 771, 775 (3d Cir. 1967), vacating and
remanding 44 T.C. 549 (1965).
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