Scully v. Director, Division of Taxation

These consolidated appeals arise from final decisions of the Tax Court striking down assessments by the Director, Division of Taxation (Director), of New Jersey State Gross Income Tax (GIT) plus penalty and interest through January 15, 1996 against Michael and James Scully each in the equal amounts of $128,493.58, for income derived from their partnership in the tax year 1992. The income, in the amount of $2,117,119, had been determined by the Director to have been received from the discharge of a loan debt of the partnership.

The facts underlying this appeal are not in dispute. Plaintiffs…