TAX COURT OPINION

Case: E. Warren Goss
Docket Number: 24227-05
Judge: Laro
Opinion Type: memo
Filed: 01/25/2007
Pages: 4

T .C . Memo . 2007-16 UNITED STATES TAX COUR T E . WARREN GOSS, Petitioner v . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 24227-05 . Filed January 25, 2007 . E . Warren Goss , for petitioner . Virginia L . Hamilton , for respondent . MEMORANDUM OPINIO N 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 ta x SERVED "JAN 2 5 2007 /,~ - 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 sessio n commencing in Denver, Colorado, on September 11, 2006 . On September 7, 2006, the parties met and reached a basis o f 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 reference d session, respondent's counsel informed the Court that the partie s 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 .