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evidence that $25,130 was received on account of tort
or tort type personal injuries. Therefore, the burden
of proof with respect to that amount shifted to R, and
R did not meet his burden of proof with respect to that
amount. P did not produce credible evidence with
respect to the amount that he received in excess of
$25,130. Thus, P bears the burden of proof regarding
the amount in excess of $25,130, and P has failed to
prove that this amount is excludable from gross income
under sec. 104(a)(2), I.R.C.
Held, further, R is not equitably estopped from
arguing that part of the settlement payment is not
excluded from income under sec. 104(a)(2), I.R.C.
David M. Fogel and Robert R. Rubin, for petitioners.
Steven J. Mopsick, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
RUWE, Judge: Respondent determined a deficiency of $11,576
in petitioners’ Federal income tax and an accuracy-related
penalty of $2,315 pursuant to section 6662(a)1 for 1996.
Respondent concedes the accuracy-related penalty. The issue for
decision is whether any of the money received by Mr. Forste in
1996 as a result of a settlement between him and his former
employer was properly excluded from gross income under section
104(a)(2) as damages received on account of personal injuries or
sickness.
1All section references are to the Internal Revenue Code in
effect for the taxable year in issue, and all Rule references are
to the Tax Court Rules of Practice and Procedure.
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