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The sole issue for decision is whether, under section 61(a),
a special longevity payment to petitioner, as a retiree, from his
former employer during 1996 is includable in gross income, or
whether such payment is excludable from gross income as a gift
under section 102(a).
Some of the facts were stipulated. Those facts and the
accompanying exhibits are so found and are incorporated herein by
reference. Petitioner's legal residence at the time the petition
was filed was Bloomington, Minnesota.
Petitioner is an attorney and, except for a brief period in
the practice of law, was employed on the editorial staff of West
Publishing Co. (the Company), a legal publishing company, at St.
Paul, Minnesota. Petitioner began his employment with the
Company on July 1, 1954 and retired on December 1, 1979, a period
in excess of 25 years. Petitioner's former employer was highly
successful in the legal publishing business and enjoyed an
excellent relationship with its employees.
In early 1996, the Company announced to its employees and
retirees that the Company would be acquired in a merger with
the Thomson Corp. of Stamford, Connecticut. Sometime in June
1996, the merger was completed, and West Information Publishing
Group became the surviving entity. Petitioner, as a retiree,
received a letter from the Company, his former employer, in June
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