Ralph W. Emerson and Suzanne O. Emerson - Page 16

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               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                    
          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 for                      

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