In Uncategorized on 11/10/2022 at 15:20

Jennifer Joy Fields, T. C. Sum. Op. 2022-22, filed 11/10/22, claims the write-off of the $73K her employer carried on its books as owed to her employer when she left her employer, was a gift.

According to STJ Peter (“HB”) Panuthos, “(D)uring the time of petitioner’s employment,  the chief executive officer of [employer] was [Scott]. Text messages and emails between petitioner and [Scott] reflect a relationship between the two outside the workplace.” T. C. Sum. Op. 2022-22, at p. 2. (Footnote and name omitted).

During Ms. Fields’ tenure with employer, there were a couple wire transfers (hi, Judge Holmes) to her or for her benefit, aggregating $73K, which the employer carried in its books as employee advances. When Ms. Fields terminated her employment, the severance agreement provided she needn’t repay, but would get a Form 1099 and would owe whatever taxes were due. She got the 1099, but didn’t report or pay tax.

Ms. Fields had an unsigned version of the severance agreement which didn’t mention forgiveness or 1099s, but STJ Panuthos isn’t buying it.

“While petitioner and [Scott] corresponded after her separation from [employer], their communications do not demonstrate that the payments were intended to be a gift. While petitioner and [Scott] reached an oral compromise regarding the terms of separation, the second, revised draft severance agreement was not signed. Even considering the revised agreement and a relevant provision, it is ambiguous at best. The text of the revised draft severance agreement does not necessarily support petitioner’s position that the employer intended a gift to petitioner. At best, it reflects petitioner’s attempt to recharacterize the payments as a gift, which apparently neither [Scott] nor [employer] agreed to. There is no evidence in the record from which the Court could conclude that [Scott] or [employer] intended to make a gift to petitioner. The payments were made from [employer] to petitioner and recorded as accounts receivables in [employer]’s accounting records. [Employer]’s inclusion of the disputed amount in the signed and executed severance agreement and the subsequent issuance of a Form 1099–MISC indicates that the payments were not intended to be a gift.

“We find petitioner’s testimony that she had a personal relationship with [Scott] is insufficient to support her contention that the payments were a gift.” T. C. Sum. Op. 2022-22, at pp. 5-6. (Names omitted).

Chops follow.


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