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c. Whether Petitioner’s Opposition to the Buyout
Precludes Taxation of the Payments in the Years
the Payments Were Received
Petitioner contends that under the claim of right doctrine
the payments are not taxable to him in the years he received them
because he opposed the stock buyout, he established a separate,
interest-bearing account to hold the payments, and he did not use
the funds during the years in issue.
Contrary to petitioner’s contention, a payment properly made
to a taxpayer is includable in income in the year paid if, as
here, the taxpayer (a) receives and deposits the payment in an
unrestricted account, (b) seeks to invalidate the transaction or
circumstance which caused the payment to be made, and (c) has no
fixed obligation to pay the amount to another party. Hope v.
Commissioner, 471 F.2d 738, 741-742 (3d Cir. 1973) (sale of stock
taxable in year of sale despite taxpayers’ efforts to rescind
stock sale in that year), affg. 55 T.C. 1020 (1971). In
addition, a taxpayer is taxable in the year the taxpayer receives
wages where the taxpayer tried to return the wages to her
employer and the employer refused to accept repayment. Miller v.
Commissioner, T.C. Memo. 1963-341, affd. without published
opinion 15 AFTR 2d 321, 65 USTC par. 9,288 (9th Cir. 1965). In
both of these cases, like the instant case, the taxpayer’s
renunciation was not accepted by the other party.
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