T.C. Memo. 2006-48
UNITED STATES TAX COURT
JESSE AND TAWARA GOODE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9914-04. Filed March 21, 2006.
Ps did not include in their 2001 Federal income
tax return payments totaling $135,000, remitted
pursuant to a settlement agreement entered into between
petitioner-husband (P-H) and the District of Columbia.
Under the terms of the settlement agreement, the
proceeds at issue were designated as attorney’s fees
and “claims and out-of-pocket expenses”, and were to be
considered as non-taxable amounts pursuant to sec.
104(a)(2), I.R.C. Ps were not furnished with a timely,
properly issued Form 1099-Misc., Miscellaneous Income.
Held: Ps are not entitled to exclude the $135,000
settlement payment from their gross income under sec.
104(a)(2), I.R.C. The record does not establish that
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