Elliot Virgil Wilkerson - Page 4




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          such plans; however, after several conferences and meetings                 
          between the union and the company, an agreement was reached that            
          would allow union workers to operate the new mill.  A memorandum            
          of understanding (the memorandum) was entered into between the              
          company and the two unions that represented the employees.  In              
          the memorandum, the employees agreed that there would be "no                
          grievances, arbitrations, NLRB charges, or any other litigation             
          surrounding the new longwood chipping operations."  This                    
          provision represented a forfeiture of rights that the employees             
          had in the collective bargaining agreement.  The new mill,                  
          accordingly, was staffed by the company's union employees,                  
          including petitioner.  For the 2 years at issue, petitioner's               
          employment was at the new mill and was subject to the terms of              
          the memorandum.                                                             
               For the year 1997, petitioner's wages with the company were            
          $60,300, and, for 1998, his wages were $60,461.  On his Federal             
          income tax return for 1997, petitioner included the $60,300 as              
          income; however, he later filed an amended return for 1997 in               
          which he excluded from income the $60,300 in wages he earned with           
          the company.  On his Federal income tax return for 1998,                    
          petitioner did not include as income any wage or salary income,             
          including the $60,461 paid to him by the company.                           









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