PURSUANT TO INTERNAL REVENUE CODE
SECTION 7463(b),THIS OPINION MAY NOT
BE TREATED AS PRECEDENT FOR ANY
T.C. Summary Opinion 2006-51
UNITED STATES TAX COURT
JOHN BOTHE AND BARBARA BOTHE, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 6737-04S. Filed April 12, 2006.
Stanley Pressment, for petitioners.
Michelle L. Maniscalco, for respondent.
CARLUZZO, Special Trial Judge: This case was heard pursuant
to the provisions of section 7463 of the Internal Revenue Code in
effect at the time the petition was filed. Unless otherwise
indicated, subsequent section references are to the Internal
Revenue Code in effect for 1999. Rule references are to the Tax
Court Rules of Practice and Procedure. The decision to be
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entered is not reviewable by any other court, and this opinion
should not be cited as authority.
Respondent determined a $25,056 deficiency in petitioners’
1999 Federal income tax. All adjustments that give rise to the
deficiency have been agreed upon by the parties-–their dispute
involves an item reported on petitioners’ 1999 Federal income tax
return. John Bothe (petitioner) sued his former employer.
Petitioners included the settlement proceeds from that lawsuit in
the income reported on their 1999 return. They now take the
position that it was a mistake to have done so. The issue for
decision is whether those settlement proceeds are excludable from
income pursuant to section 104(a)(2).
Some of the facts have been stipulated and are so found.
Petitioners are married to each other. They filed a timely joint
1999 Federal income tax return. At the time the petition was
filed in this case, they resided in Corfu, New York.
Years ago, at age 19, petitioner began working at the New
Jersey Sports and Exposition Authority, a.k.a. the Meadowlands
racetrack (the Meadowlands). In 1979, he became an assistant
race track announcer there. In 1990, petitioner became the