- 16 - In Robinson v. Commissioner, 102 T.C. at 123-124, the parties entered into a settlement agreement that did not contain an allocation, but they included an allocation in the final judgment. The judge approved the judgment which allocated 95 percent of the settlement amount to a personal injury claim solely to minimize the tax liability. This Court refused to accept the allocation in the final judgment stating: Petitioners therefore desired, and were given, the unfettered discretion to allocate the settlement proceeds in any manner they desired in order to minimize their Federal income tax liability. We find that petitioners deliberately and unilaterally arrived at the allocations contained in the final judgment solely with a view to Federal income taxes, and not to reflect the realities of their settlement. [Id. at 129.] In Robinson, the Court concluded that the defendant did not intend to settle one claim to the exclusion of another. Similarly, in this case, the defendants solely intended to dispose of the case and secure their proprietary interests, and they did not object to petitioner’s attempt to structure the settlement to satisfy his tax goals. The defendants’ counsel testified that how petitioner structured the pleadings was his “problem” once the settlement amount was agreed to and the proprietary interests were secure. As to petitioner’s belated claim for personal physical injury, the “courts have not looked with favor upon retroactive revisions of written instruments * * * as a ground forPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011