Benavides v. United States

WIENER, Circuit Judge:

Plaintiffs-Appellants Linda Bena-vides, Paul Benavides, and David Bena-vides (collectively, “the Taxpayers”) brought suit against the government, seeking a refund for income taxes paid on a jury award of punitive damages received in a state wrongful death action. The district court granted the government’s motion for summary judgment, holding that the Taxpayers could not exclude their punitive damages award from gross income under 26 U.S.C. § 104(a) and (c). The Taxpayers appeal. We agree with the district court that 26 U.S.C. § 104(c) does not apply to the Taxpayers’…