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the object of the “origin of the claim” test is to find
the transaction or activity from which the taxable
event proximately resulted, United States v. Gilmore,
372 U.S. 39, 47, * * * (1963), or the event that “led
to the tax dispute.” Keller St. Dev. Co. v.
Commissioner, 688 F.2d 681 (9th Cir. 1982). The origin
is determined by analyzing the facts and determining
what the nature of the transaction is. Keller, 688
F.2d at 681.
Although petitioner in the agreement settling her claim in
the State Farm class action lawsuit waived all rights to be hired
by State Farm, the agreement characterized the settlement as “the
compromise of a claim for agent earnings.” Petitioner cites
McKay v. Commissioner, 102 T.C. 465 (1994), vacated and remanded
in an unpublished opinion 84 F.3d 433 (5th Cir. 1996); Metzger v.
Commissioner, 88 T.C. 834 (1987), affd. without published opinion
845 F.2d 1013 (3d Cir. 1988); and Yates Indus., Inc. v.
Commissioner, 58 T.C. 961 (1972), for the propositions that this
Court, in making its facts and circumstances analysis of the
origin of a claim, not only gives great deference to the terms of
a settlement negotiated at arm’s length, but that in these cases
“this Court determined that the parties [sic] specific allocation
of the settlement proceeds should be respected as it accurately
reflected the origin of the claim and the settlement of those
proceeds.”
We have here some tensions between the initial positions of
Congress and the Commissioner, restricting the availability of
qualified plans for the self-employed because of the tax shelter
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