Reffett v. Commissioner
United States Tax Court
1. Petitioner Reffett instituted action against UMWA for damages for destruction of his coal mine and equipment, and entered into contract with two witnesses to pay them 10 percent each of the amount of his recovery if they would testify for him and otherwise assist him in obtaining evidence. Held, the amounts paid to the witnesses out of the recovery are not excludable from Reffett's gross income.
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1. Petitioner Reffett instituted action against UMWA for damages for destruction of his coal mine and equipment, and entered into contract with two witnesses to pay them 10 percent each of the amount of his recovery if they would testify for him and otherwise assist him in obtaining evidence. Held, the amounts paid to the witnesses out of the recovery are not excludable from Reffett's gross income. Held, further, the amounts paid the witnesses are not deductible by Reffett. 2. Addition to tax for failure to file a declaration of estimated tax for the year 1954 sustained against petitioner…
1Opinion of the Court
Drennen, Judge:
Respondent determined deficiencies in income tax and additions to tax for 1954 as follows:
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Petitioner H. C. Bolling, an attorney (hereinafter referred to as Bolling), represented petitioner Sanford Reffett (hereinafter referred to as Reffett) in an action for damages brought by Reffett against the United Mine Workers of America (hereinafter referred to as UMWA) for destruction of Reffett’s coal mine and mining equipment. Reffett obtained a verdict for damages, and the judgment was settled about the middle of 1954 by the UMWA paying to Bolling, as trustee, the sum…
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