Herbel v. Commissioner
United States Tax Court
M, a subch. S corporation, purchased working interests in various gas wells that were subject to a gas purchase contract with A. To avoid litigation over a so-called take or pay provision in the contract, M and A entered into a Settlement Agreement under which A paid $ 1,850,000 to M in 1988 but reserved the right to recoup the payment from future gas purchases under the contract.
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M, a subch. S corporation, purchased working interests in various gas wells that were subject to a gas purchase contract with A. To avoid litigation over a so-called take or pay provision in the contract, M and A entered into a Settlement Agreement under which A paid $ 1,850,000 to M in 1988 but reserved the right to recoup the payment from future gas purchases under the contract. The Settlement Agreement further provided that M would pay any unrecouped amount to A in cash in the event that it terminated the contract or the wells became substantially depleted. M did not report the payment as…
1Opinion of the Court
STEPHEN R. AND MARY K. HERBEL, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent; JERRY R. AND CAROLYN M. WEBB, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Herbel v. Commissioner
Docket Nos. 22079-93, 22080-93.
United States Tax Court
106 T.C. 392; 1996 U.S. Tax Ct. LEXIS 23; 106 T.C. No. 22;
June 5, 1996, Filed
An appropriate order will be issued denying petitioners' motion for summary judgment.
M, a subch. S corporation, purchased working interests in various gas wells that were subject to a gas purchase contract with A. To avoid litigation over a so-called take or pay…
2Cases cited27 opinions
- Commissioner v. Glenshaw Glass Co.Supreme Court of the United States · 1955
- Commissioner v. P. G. Lake, Inc.Supreme Court of the United States · 1958
- Tyler v. United StatesSupreme Court of the United States · 1930
- Anderson v. HelveringSupreme Court of the United States · 1940
- Thomas v. PerkinsSupreme Court of the United States · 1937
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