- 34 - 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.Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
Last modified: May 25, 2011