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Respondent determined a deficiency of $20,511 in
petitioner’s Federal income tax for 2000 and an accuracy-related
penalty of $4,102 under section 6662(a). After concessions,2 the
issues for decision to be entered are:
(1) Whether $58,000 of the amount that petitioner received
from settlement of a lawsuit is excludable from her gross income
under section 104(a)(2). We hold it is not excludable.
(2) Whether petitioner is liable for an accuracy-related
penalty under section 6662(a). We hold she is not liable.
Some of the facts have been stipulated and are so found.
The stipulated facts and the accompanying exhibits are
incorporated into our findings by this reference. Petitioner
resided in Pomona, New York at the time she filed the petition in
this case.
Background
Work and Pregnancy
Petitioner began work with Liberty Travel, Inc. (Liberty),
as a clerical worker on February 2, 1996, and was promoted to
operations supervisor within 2 months at an increased rate of
2Respondent concedes petitioner is not liable for the self-
employment tax included in the notice of deficiency. Respondent
also concedes that, assuming we find that the $58,000 amount is
not excludable, petitioner is entitled to an itemized deduction
of $20,000 for legal expenses, subject under sec. 67(a) to the
2-percent floor.
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