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had recently reached a basis of settlement and would like
additional time to submit to the Court a stipulated decision
document reflecting that settlement. Subsequently, after trying
unsuccessfully to secure a stipulated decision document from
petitioner, respondent filed the instant motion with the Court.
The motion states that the computations flowing from the
settlement agreement result in a $33,146 deficiency in
petitioner’s 1997 Federal income tax and a $8,286.50 addition
thereto under section 6651(a)(1). In response to respondent’s
motion, petitioner argues that the settlement agreement is
incorrect in that the $30,000 of rental income shown in the
agreement is already reflected in the $127,000 of gross receipts
also shown in the agreement. Respondent argues that the $30,000
of rental income is in addition to the $127,000 of gross
receipts.
We have consistently held that settlement agreements are
subject to the application of general principles of contract law.
See Robbins Tire & Rubber Co. v. Commissioner, 52 T.C. 420,
435-436, supplemented by 53 T.C. 275 (1969). Absent a showing of
lack of formal consent, fraud, mistake, or some other similar
ground, a settlement agreement that has led to cancellation of
the trial will be upheld. See Dorchester Indus. Inc. v.
Commissioner, 108 T.C. 320 (1997), affd. 208 F.3d 205 (3d Cir.
2000). Petitioner claims that the Court should disregard the
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Last modified: May 25, 2011