- 2 -
in part and remanded 912 F.2d 1182 (9th Cir. 1990) (the State
Farm class action lawsuit), are included in her gross income.1
Petitioner concedes that the gross proceeds of her
settlement of the State Farm class action law suit--$283,543--are
not excluded from her gross income under section 104(a)(2),2 but
she attacks the validity of respondent’s notice of deficiency on
multiple grounds: That respondent violated his reopening
procedures, that respondent performed a second inspection of
petitioner’s books of account in violation of section 7605(b),
and that respondent is equitably estopped from issuing the notice
of deficiency. Petitioner also claims, if the validity of the
notice should be sustained, that she is entitled to deduct, as
section 162 business expenses, two items she did not claim on her
1992 income tax return: Her contribution to a private pension
plan and her attorney’s fees and costs in the State Farm class
action lawsuit.
We sustain the validity of respondent’s notice and reject
petitioner’s claims to the private pension plan contribution
1 For a description of the State Farm class action lawsuit
in the context of the claimants’ income tax treatment, see Brewer
v. Commissioner, T.C. Memo. 1997-542, affd. without published
opinion 172 F.3d 875 (9th Cir. 1999).
2 Unless otherwise noted, all section references are to the
Internal Revenue Code in effect during the year in issue, and all
Rule references are to the Tax Court Rules of Practice and
Procedure.
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