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and this opinion shall not be treated as precedent for any other
case. The issues for decision are whether petitioner may exclude
from income a settlement award relating to a lawsuit and is
liable for a section 6662(a) accuracy-related penalty.
Background
Petitioner is a licensed attorney in the State of Michigan.
Prior to 2001, he worked, for 13 years, as an employee for the
Internal Revenue Service. In 2001, petitioner was an employee of
Duro-Last Roofing, Inc. (Duro-Last), a roofing company based in
Saginaw, Michigan. On September 11, 2001, Duro-Last terminated
petitioner’s employment. In response, on December 5, 2001,
petitioner filed a Complaint and Jury Demand (the complaint) with
the Circuit Court of Saginaw County, Michigan. The complaint
alleged that Duro-Last had violated the State of Michigan
Whistleblower’s Protection Act, and that, based on Duro-Last’s
wrongful actions, petitioner suffered damages.
Subsequent to the filing of the complaint, the matter was
referred to mediation. In 2003, as a result of mediation, Duro-
Last paid petitioner $80,000. In addition to its payment, Duro-
Last issued petitioner a Form 1099-MISC, Miscellaneous Income.
Petitioner attached the Form 1099-MISC to his Form 1040, U.S.
Individual Income Tax Return, but did not include the settlement
award in gross income.
On January 3, 2006, respondent sent petitioner a notice of
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