Lee E. Seidel - Page 11

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          including the unreported income in the amount of $30,030 on his             
          1999 tax return, and respondent also asserted that Ms. Seidel was           
          responsible for including in income the amount of $46,970                   
          representing the difference between $77,000 and the $30,030                 
          reported on her 1999 tax return.                                            
               In the present circumstance, respondent is caught in a                 
          potential “whipsaw” position.  A whipsaw occurs when different              
          taxpayers treat the same transaction involving the same items               
          inconsistently, thus creating the possibility that income could             
          go untaxed or two unrelated parties could deduct the same                   
          expenses on their separate returns.  In such circumstances,                 
          respondent is fully entitled to defend against inconsistent                 
          results by determining in notices of deficiency that both parties           
          to the transaction are liable for the deficiency.  Estate of                
          Dooley v. Commissioner, T.C. Memo. 1992-557; Moore v.                       
          Commissioner, T.C. Memo. 1989-306.                                          
               Respondent in the notice of deficiency determined that                 
          petitioner is responsible for including the unreported income               
          from the CWSC 401(k) plan distribution in the amount of $30,030.            
          However, at trial respondent conceded that petitioner should be             
          liable for tax on the following portions of the QDRO                        
          distribution:  (1) Petitioner’s receipt of a cash payment in the            
          amount of $10,000 from Ms. Seidel after her attorney received the           
          distribution pursuant to the QDRO; and (2) petitioner’s portion             

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