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You stated that you would be willing to settle this matter
for the sum of $45,000.00 including reinstatement to your
former position of employment. You stated that $45,000.00
figure was comprised of your estimate of your lost wages to
date as well as the amount awarded by the arbitrator. At my
suggestion, you also made an alternative settlement proposal
without reinstatement. Specifically, you proposed a
resolution of this matter for $150,000.00 which would not
include reinstatement of your employment.
Ultimately, petitioner and ATC settled for $115,000, of
which $25,160 represents back wages not in issue here. It
appears that the remaining $89,840 represents the amount of the
arbitrator’s award, plus payment for petitioner’s waiver of any
right to reinstatement to his former position. The settlement
agreement expressly provides that petitioner “agrees to waive any
rights to reinstatement or to apply for re-employment with
[ATC]”. Petitioner presented no evidence other than his own
testimony that he “was physically injured” by ATC. It is well
established that this Court is not bound to accept a taxpayer’s
self-serving, unverified, and undocumented testimony. Shea v.
Commissioner, 112 T.C. 183, 189 (1999); Tokarski v. Commissioner,
87 T.C. 74, 77 (1986). Our examination of the surrounding facts
and circumstances leads us to conclude that ATC did not intend
that any portion of the $89,840 be allocated to personal physical
injury or physical sickness.
On this record, we sustain respondent’s determination.
We next consider whether petitioner is liable for an
addition to tax under section 6651(a)(1) and the accuracy-related
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Last modified: May 25, 2011