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damages for sexual and racial harassment, failure to take
reasonable steps to prevent and correct harassment, and
retaliation, against Onyx and petitioner’s former supervisor in
the Superior Court of the State of California, County of Contra
Costa. In his suit against Onyx, petitioner stated a prayer for
relief for compensatory damages, mental and emotional distress
damages, punitive damages, interest, attorney’s fees, and costs
of suit incurred.
In September 2004, petitioner reached a settlement agreement
with Onyx and petitioner’s former supervisor with respect to the
suit he filed on December 16, 2003. Pursuant to the settlement
agreement, Onyx paid petitioner $41,651.81 in 2004. Petitioner
timely filed his 2004 Federal income tax return, but he did not
report the amount received from the settlement on the return.
Respondent determined that $41,6512 was includable in
petitioner’s gross income and issued a notice of deficiency to
petitioner on March 13, 2006.
Discussion
In general, the Commissioner’s determinations set forth in a
notice of deficiency are presumed correct, and the taxpayer bears
the burden of proving that these determinations are in error.
Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
2 The 81-cent difference between the amount paid and listed
in the notice of deficiency is presumably due to rounding by
respondent.
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Last modified: November 10, 2007