Opinion
25473-21
10-16-2023
AHMET GOZUSULU & SALAMATU ADAMU GOZUSULU, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
ORDER AND DECISION
Elizabeth A. Copeland, Judge
This case was called for trial from the calendar of the Court's Kansas City, Missouri Trial Session on October 2, 2023. There was no appearance by or on behalf of Petitioners. Counsel for Respondent appeared and was heard. On October 2, 2023, following the calendar call, Respondent filed with the Court a Motion for Entry of Decision. Respondent requested that the Court enter a decision on the basis of the agreed upon unexecuted decision documents attached to the Motion. The parties filed a Stipulation of Settled Issues on September 14, 2023, which affirmed the terms of the unexecuted decision documents.
In the Tax Court, concessions, compromises, and settlements can be memorialized in various ways, including (as here) by the parties' execution of a stipulation of settled issues. "[A] settlement stipulation is in all essential characteristics a mutual contract by which each party grants to the other a concession of some rights as a consideration for those secured and the settlement stipulation is entitled to all of the sanctity of any other contract." Saigh v. Commissioner, 26 T.C. 171, 177 (1956). The agreement manifested by a stipulation of settled issues will not be set aside except as necessary to prevent "manifest injustice," e.g., in the case of fraud or misrepresentation of material fact. See Rakosi v. Commissioner, T.C. Memo 1991-630, 62 T.C.M. (CCH) 1563, 1565. This Court regularly enforces settlement stipulations (whether written or orally stipulated into the record) unless for reasons of justice a party should be relieved from those stipulations. See McMullen v. Commissioner, T.C. Memo 2015-219.
The record demonstrates that the terms in the Stipulation of Settled Issues were agreed to by both parties. Petitioners did not appear in Court, nor did they in any way contest the agreed upon settlement. Accordingly, the parties' settlement stipulations are binding and enforceable, and we will grant Respondent's motion for entry of decision.
Furthermore, on August 18, 2023, Respondent filed with the Court a Motion for Order to Show Cause Why Proposed Facts and Evidence Should Not be Accepted as Established Pursuant to Rule 91(f). On September 5, 2023, the Court issued an Order to Show Cause as to why Respondent's Motion should not be granted. On September 14, 2023, the parties filed with the Court a Stipulation of Settled Issues, settling all issues in this case. Given the settled issues, Respondent's August 18, 2023, motion for order to show cause is now moot.
Upon due consideration, and for cause, it is
ORDERED that Respondent's Motion for Order to Show Cause Why Proposed Facts and Evidence Should Not be Accepted as Established Pursuant to Rule 91(f), filed with the Court on August 18, 2023, is denied as moot. It is further
ORDERED the Court's Order to Show Cause, issued on September 5, 2023, is hereby discharged. It is further
ORDERED that Respondent's Motion for Entry of Decision, filed with the Court on October 2, 2023, is granted in that it is
ORDERED AND DECIDED that for taxable year 2017, in addition to the amounts previously assessed by Respondent based upon Petitioners' late filed returns, there is a deficiency in income tax for taxable year 2017 due from Petitioners in the amount of $69,230.00, additions to tax under the provisions of I.R.C. § 6651(a)(1) in the amount of $3,042.55, and penalties under the provisions of I.R.C § 6662(a) in the amount of $13,777.20. Furthermore, there is a valid prepayment credit in the amount of $344.00 available to offset the 2017 amounts due. It is further
ORDERED AND DECIDED that there is a deficiency in income tax for taxable year 2018 due from Petitioners in the amount of $28,156.00, additions to tax under the provisions of I.R.C. § 6651(a)(1) in the amount of $6,900.00, and penalties under the provisions of I.R.C § 6662(a) in the amount of $5,520.00. Furthermore, there is a valid prepayment credit in the amount of $556.00 available to offset the 2018 amounts due.