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FINDINGS OF FACT
The parties have stipulated most of the relevant facts,
which we incorporate herein by this reference. When they filed
their petition, petitioners resided in Teaneck, New Jersey.
Mr. Ackerman was previously employed in the New York office
of Rudolf Wolff & Co., Inc. (employer). Mr. Ackerman
participated in employer’s nonqualified executive deferred
compensation plan (plan). Pursuant to the plan’s governing
document, any plan payments to employees were to be made “net of
applicable taxes, including wage withholding taxes.”
On or about June 30, 2000, employer’s businesses were sold
to another entity. Mr. Ackerman was among a few employees
retained temporarily to assist in wrapping up business in the New
York office. In return, he was entitled to receive a $120,000
“redundancy payment”, payable on termination.
Mr. Ackerman’s 2001 Form W-2, Wage and Tax Statement (W-2),
from employer shows taxable wages, tips, and other compensation
totaling $331,915.99, representing the $120,000 “redundancy
payment” and a $211,296 plan distribution. The W-2 shows only
$500 of Federal income tax withheld. Employer is no longer in
business; petitioners have no contact address for employer’s
successor or for any custodian of employee records.
On their 2001 joint Form 1040, U.S. Individual Income Tax
Return (Form 1040), petitioners included in gross income “Wages,
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Last modified: May 25, 2011