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The Xircom company extended a job offer to Shahram
Manighalam (petitioner). Petitioner then resigned from a
position with his prior employer, American Telephone & Telegraph
(AT&T). However, Xircom rescinded its job offer before
petitioner began his employment at Xircom, and AT&T refused
petitioner’s request to rescind his resignation. As
compensation, Xircom paid $59,163 to petitioner in 1994. The
issues for decision are:1
1. Whether petitioners may exclude the Xircom payments for
1994 from gross income under section 104(a)(2) as damages for a
personal injury. We hold that they may not.
2. Whether petitioners are liable for the addition to tax
for failure to timely file under section 6651(a)(1) for 1994. We
hold that they are.
3. Whether the statute of limitations bars assessment of
tax for 1994. We hold that it does not.
Section references are to the Internal Revenue Code as
amended and in effect for the year in issue, and Rule references
are to the Tax Court Rules of Practice and Procedure.
1 Before trial, Donna J. Collins conceded all separate
issues raised in her petition and agreed to be bound by the
Court’s decision on all other issues in Shahram Manighalam’s
case.
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Last modified: May 25, 2011