Deborah A. Messina - Page 11

                                       - 11 -                                         
          parties stipulated that “Petitioner was paid $170,000 from [sic]            
          the State of Maryland on account of her successful prosecution of           
          a claim for wrongful discharge and back wages.”                             
               Gross income means all income from whatever source derived.            
          Sec. 61(a).  On the record before us, we find that petitioner has           
          failed to carry her burden of establishing that the entire amount           
          of the $170,000 settlement should be excluded from her gross                
          income.  On that record, we further find that petitioner has                
          failed to carry her burden of establishing that the $84,500                 
          contingency fee that she paid to Mr. Ober out of the $170,000               
          settlement should be excluded from her gross income.  Commis-               
          sioner v. Banks, 543 U.S. 426, 430 (2005) (holding that, as a               
          general rule, where a litigant’s recovery constitutes income, the           
          litigant’s income includes the portion of the recovery paid to              

               6(...continued)                                                        
                    Based upon the above information you have stated                  
               that your client intends to claim a higher number of                   
               exemptions than she in fact has in order to substan-                   
               tially reduce the projected withholding of $60,136.  In                
               your estimation, the number of exemptions will be well                 
               above the 2 exemptions that she claimed prior to her                   
               termination.  It is your opinion, based upon advice                    
               from a tax expert, that the number will be legally                     
               defensible because it reflects a good faith projection                 
               of Mrs. Messina’s tax liability.  Further, you have                    
               stated that Mrs. Messina fully understands that her                    
               claim may subject her to an inquiry by the I.R.S. and                  
               that there may be negative tax consequences and/or                     
               penalties because of her decision to claim higher                      
               exemptions.  [Reproduced literally.]                                   






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011