Stephen R. and Mary K. Herbel v. Commissioner

106 T.C. No. 22

UNITED STATES TAX 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 Docket Nos. 22079-93, 22080-93. Filed June 5, 1996. 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 Settle- ment Agreement under which A paid $1,850,000 to M in 1988 but reserved the right to recoup…