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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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