Stearns v. Commissioner
United States Tax Court
For several years decedent, Lester O. Stearns, was employed as sales manager of a manufacturing corporation under a written contract for an indefinite term.
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For several years decedent, Lester O. Stearns, was employed as sales manager of a manufacturing corporation under a written contract for an indefinite term. On March 16, 1943, the board of directors of the corporation adopted a resolution terminating his employment as of May 31, 1943. The corporation paid him his salary to May 31, 1943. Stearns claimed the corporation was without authority to terminate his employment and sued the corporation for breach of contract and for damages. On December 31, 1945, the suit was compromised by the payment to Stearns of $ 15,000, of which Stearns paid his…
1Opinion of the Court
OPINION.
Black, Judge:
The respondent having conceded that he erred in imposing a penalty of $247.75 for underestimation of estimated tax for the year 1945, we have but one issue left for our determination. That issue may be stated as follows:
Was a net amount of $10,000 received by Stearns in 1945 in settlement of bis suit for breach of an employment contract and of all his claims arising under said contract “back pay” within the meaning of section 107 (d) of the Internal Revenue Code?
There is no real dispute between the parties as to the facts and we have endeavored to give full details of…
2Cases cited1 opinion
- Kenny v. CommissionerUnited States Tax Court · 1945
3Cited by10 opinions
- Smith v. CommissionerUnited States Tax Court · 1951
- Alexander v. Internal Revenue Service of the United StatesCourt of Appeals for the First Circuit · 1995
- Alexander v. CommissionerUnited States Tax Court · 1995
- McLaughlin v. Union-Leader Corp.Supreme Court of New Hampshire · 1956
- Estate of Lester O. Stearns, Deceased, Inez Stearns, Administratrix, and Inez Stearns, Surviving Wife v. Commissioner of Internal RevenueCourt of Appeals for the Sixth Circuit · 1951
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