Wigton v. Director, Division of Taxation

LASSER, P.J.T.C.

Taxpayers contest the denial by the Director of the Division of Taxation (Director) of a refund claim contained in taxpayers’ *3751985 amended gross income tax return. In their amended return, taxpayers sought a refund of tax paid on capital-gain income from corporate distributions, a portion of which was later repaid to other stockholders in settlement of a lawsuit. Taxpayers received a deduction for the repayment on their 1989 federal income tax return under the “claim-of-right” doctrine and § 1341 of the Internal Revenue Code (IRC). Taxpayers’ refund claim was denied by the…