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The sole issue for decision is whether settlement proceeds
of $30,599 received by petitioners during 1995 constitute damages
excludable from gross income under section 104(a)(2).
Adjustments to wages subject to FICA and Medicare, and itemized
deductions for attorney’s fees and costs are computational and
will be resolved by the Court’s holding on the disputed issue in
this case.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time of filing the
petition, petitioners resided in Kent, Washington. References to
petitioner in the singular are to Shelley F. Fawcett.
Petitioners were married in early 1990. After graduating
from college in June 1990, petitioner was hired by PayLess Drug
Stores, Norwest, Inc. (PayLess) as a supervisor trainee.
Petitioner was initially placed in a PayLess store in Redmond,
Oregon, even though Mr. Fawcett at that time was in the military
and stationed in Washington. Petitioner directly reported to an
assistant store manager and/or a store manager.
Approximately 4 months later, petitioner was transferred to
a PayLess store located in Bellevue, Washington, only to be
subsequently transferred in 6 months to Twin Lakes, Washington.
Petitioner worked at the Twin Lakes store for approximately 9
months. Petitioner was transferred on 2 more occasions to
different stores in Washington. Within a 3-year period,
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