E. Warren Goss v. Commissioner

2007 T.C. Memo. 16

• Court: United States Tax Court
• Decided: January 25, 2007
• Docket: 24227-05
• Status: Unpublished

Opinion

T.C. Memo. 2007-16

UNITED STATES TAX COURT

E. WARREN GOSS, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Docket No. 24227-05. Filed January 25, 2007.

E. Warren Goss, for petitioner.

Virginia L. Hamilton, for respondent.

MEMORANDUM OPINION

LARO, Judge: Respondent moves the Court to enter a decision

consistent with a settlement agreement signed by the parties and

attached to respondent’s motion as an exhibit. We shall grant

respondent’s motion.

Petitioner, a practicing attorney, petitioned the Court to

redetermine a $69,986 deficiency in his 1997 Federal income tax - 2 -

and a $17,496.50 addition thereto under section 6651(a)(1).1

This case was set for trial on the Court’s regular session

commencing in Denver, Colorado, on September 11, 2006. On

September 7, 2006, the parties met and reached a basis of

settlement. That settlement was later memorialized in a

September 8, 2006, letter sent from respondent to petitioner and

signed by petitioner and delivered back to respondent. The

letter states that the parties have reached the following

agreement regarding petitioner’s 1997 Federal income tax:

1. Petitioner has $127,000 in Schedule C gross receipts;

2. Petitioner has $57,000 in Schedule C expenses;

3. Petitioner has $30,000 in rental income;

4. Petitioner’s correct filing status is married filing separately;

5. Petitioner is entitled to the dependency exemption for one child;

6. Petitioner is liable for an addition to tax under section 6651(a)(1);

7. Respondent timely mailed the statutory notice of deficiency and is not barred by the statute of limitations from asserting the proposed deficiency.

On September 11, 2006, at the calendar of the referenced

session, respondent’s counsel informed the Court that the parties

1 Unless otherwise indicated, section references are to the applicable versions of the Internal Revenue Code. Petitioner resided in Boulder, Colorado, when his petition was filed with the Court. - 3 -

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 - 4 -

settlement agreement because he mistakenly signed the agreement

not recognizing that the $30,000 of rental income was listed as a

term thereof. We disagree that we should disregard the signed

agreement for the reason that petitioner states. Even if

petitioner had mistakenly signed the document as claimed, such a

unilateral mistake is not a sufficient ground to set aside an

otherwise enforceable settlement agreement. See Stamm Intl.

Corp. v. Commissioner, 90 T.C. 315 (1988) (holding that a

unilateral mistake by respondent’s counsel, absent

misrepresentation by the other party, was insufficient to set

aside a settlement agreement). Such is especially so given that

petitioner is a practicing attorney and that his signing of the

settlement agreement was on the eve of his trial. See id. at

321-322.

To reflect the foregoing,

An appropriate order and decision

will be entered in accordance with

respondent’s computations.