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Biehl. The motion asserts:
FEB will be greatly prejudiced by receiving the single
Form 1099 * * * [Had] NCM issued two separate Form
1099's, FEB and his tax advisors believe the IRS would
treat only $799,000 as FEB’s earned income * * * No AMT
results if FEB is required to report only $799,000 as
provided in the settlement by specifically separating
the payments. There was no other reason to provide for
separate payments to FEB and Olimpia, Whelan, and
Lively.
While this issue has obvious importance and
potential tax consequences to FEB, to NCM it is a
distinction without a difference, whether NCM issues
two Form 1099's * * * or a single Form 1099 to FEB
should not matter to NCM, either way, NCMI has an
expense of $1,200,000 and the result to the payor is
the same. Thus, whether NCM issues one or two Form
1009's is simply an administrative task.
From the foregoing admissions it can fairly be inferred that
the separate payment to Mr. Biehl’s attorney was negotiated on
his behalf in a futile effort to minimize his Federal income tax
liability, not to serve any business purpose of NCMI that could
be fulfilled by any current performance of services by Mr. Biehl
on behalf of NCMI.
There are intimations in the settlement documents and
petitioners’ briefs that the global settlement reached by NCMI
and petitioners served the business purposes of NCMI by avoiding
its bankruptcy and trial of petitioners’ other claims, thereby
enabling NCMI to continue as a viable business entity.
Petitioners also intimate that the separate payment arrangement
was of critical importance and that the parties could not have
achieved the settlement without the separate payment arrangement.
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