1997 Tax Ct. Memo LEXIS 224">*224 An appropriate order will be issued and decision will be entered for respondent.
MEMORANDUM OPINION
DAWSON,
OPINION OF THE SPECIAL TRIAL JUDGE
COUVILLION,
| Additions to Tax | |||||
| Sec. | Sec. | Sec. | Sec. | ||
| Year | Deficiency | 6651(a)(1) | 6653(a) | 6654 | 6662(b)(1) |
| 1988 | $ 8,115 | $ 2,029 | $ 406 | $ 36 | -- |
| 1989 | 4,035 | 967 | -- | -- | $ 807 |
| 1990 | 2,022 | -- | -- | -- | 404 |
At the time the petition was filed, petitioners1997 Tax Ct. Memo LEXIS 224">*227 were legal residents of Idaho.
On the date this case was calendared for trial, the parties filed with the Court a written stipulation to be bound (the stipulation). There was no evidence adduced on that date other than the stipulation and the exhibits attached thereto.
Essentially, the stipulation is an agreement by the parties to be bound by the outcome of an appellate case involving petitioner's 1987 tax year, which, at the time this case was calendared for trial, was pending before the United States Court of Appeals for the Ninth Circuit. The litigation in the appellate case also originated with this Court, the results of which are set out in
Following petitioner's failure to execute decision documents in the instant case in accordance with the stipulation, respondent filed the motion for entry of decision.
The decision documents prepared by respondent are in accordance with the holding of the Court of Appeals for petitioner's 1987 tax year.
1997 Tax Ct. Memo LEXIS 224">*229 Petitioner objects to respondent's motion for entry of decision on the ground that the Court of Appeals based its holding on the theory that petitioner had made an anticipatory assignment of income to his former spouse and that under the rationale of 1. The case of 2. In those cases pending before this Tax Court, Petitioner 1997 Tax Ct. Memo LEXIS 224">*230 has other issues to be raised dealing with tax liability which were not raised in the Court of Appeals case cited above, to wit: A. Community Property issue; B. 3. Petitioner agreed to be bound on the issue of "assignment of anticipatory income" as presented in the Court of Appeals, but never intended to waive other issues in other cases. Kochansky further argues that under Idaho's community property law,
1997 Tax Ct. Memo LEXIS 224">*232 The petition in the instant case contains no allegations that the income at issue in this case constituted community property income. In an amended petition that was subsequently filed, no allegations were made with respect to the income being community property income. No motions have been filed by petitioner for leave to file an amended petition in order to allege the character of the income at issue as community property income. The stipulation filed by the parties states, in pertinent part: 9. The parties hereby agree to be bound to the final outcome of the case of a. If total receipts to petitioner's, Richard Kochansky's, trust account from the McNary v. Berghan lawsuit are finally determined to be taxable to petitioner in the above-referenced appealed case they will be additional taxable income to petitioner1997 Tax Ct. Memo LEXIS 224">*233 in this case in the amounts set forth in paragraph 2 of this stipulation. * * * * 10. The Tax Court's final opinion in 11. A Decision shall be submitted in this case when the Decision in 4. On September 26, 1994, at the time and place scheduled for trial in this matter, Special Trial Judge D. Irvin Couvillion stated that the case would be continued in the event that Petitioner desired to raise other issues not before the Court of Appeals. Said statement is a matter of record, but Petitioner does not presently have a transcript copy to attach hereto. 5. In light of Petitioner's intent, the direction of Judge Couvillion and Petitioner's right to due process, Petitioner desires that this case proceed to trial on other issues, and that Respondent's Motion for Entry of Decision be denied.
Petitioner misconstrues what the Court said or indicated at the time the stipulation was filed. The Court intended to allow petitioner the opportunity to litigate other issues in the instant case, which were unrelated to the issues in the 1987 case, if there were any unrelated issues. At the time, the Court had not compared the opinions of this Court and the Court of Appeals as to the 1987 case with the pleadings in the instant case for the years 1988, 1989, and 1990. A review of both court opinions regarding1997 Tax Ct. Memo LEXIS 224">*235 petitioner's 1987 tax year and the pleadings in the instant case for the subsequent years indicates that there are no unrelated issues to be heard. The instant case involves the same issue that was decided by this Court and affirmed by the Court of Appeals.
A controversy before this Court may be settled by agreement of the parties. After the parties have entered into a binding settlement agreement, the actual merits of the settled controversy are without consequence. This Court has declined to set aside a settlement duly executed by the parties and filed with the Court in the absence of fraud or mutual mistake.
1. Unless otherwise indicated, section references are to the Internal Revenue Code in effect for the years in issue. All Rule references are to the Tax Court Rules of Practice and Procedure.↩
2. The deficiencies, additions to tax, and penalty for the years 1988 and 1990 are against Richard W. Kochansky alone. For 1989, the deficiency, addition to tax, and penalty are against Richard W. Kochansky and Monica L. Miller.↩
3. The proposed decision, which is part of the motion, includes concessions by respondent of the sec. 6653(a) addition to tax for the 1988 tax year and the penalty under sec. 6662(b)(1) for the 1989 and 1990 tax years in accord with the Court of Appeals' opinion. Respondent further concedes the addition to tax under sec. 6654(a) for the 1988 tax year and that petitioner Monica L. Miller is exonerated from liability as an innocent spouse under sec. 6013(e) for the 1989 tax year. As a result of this concession as to petitioner Monica L. Miller, she executed the decision documents prepared by respondent and is not a party with respect to respondent's motion for entry of decision. The stipulation also includes a reduction of the income adjustment against petitioner for the year 1988 from $ 28,800 determined in the notice of deficiency to $ 7,200.↩
4. Briefly stated, petitioner is an attorney who had filed a medical malpractice action in 1984 on a contingent fee basis. At the time, petitioner was married to Carol A. Kochansky (Carol). Petitioner and Carol were divorced in 1985. In the property settlement between them, it was agreed that any fees earned from this litigation (net of petitioner's out-of-pocket costs) would be paid one-half to petitioner and one-half to Carol. The medical malpractice case was settled in 1987, and a portion of the contingent fee was paid in 1987, of which a portion was paid to petitioner and the remainder was paid to Carol pursuant to the property settlement agreement. On his 1987 income tax return, petitioner reported only the portion of the fee he had received. This Court and the Court of Appeals for the Ninth Circuit both held that the property settlement agreement between petitioner and Carol constituted an anticipatory assignment of income, and, under
