Miller v. Commissioner
United States Tax Court
In 1979 and 1982, P commenced civil actions for defamation. In 1983, the first action was tried, and a jury awarded P $ 500,000 in compensatory damages and $ 450,000 in punitive damages. After the verdict, P and the defendants in both actions settled P's claims. In 1983, P received $ 525,000 (after payment of costs and attorneys' fees) pursuant to the settlement agreement. Held, sec. 104(a)(2) excludes the settlement proceeds from gross income.
Read the full summary
In 1979 and 1982, P commenced civil actions for defamation. In 1983, the first action was tried, and a jury awarded P $ 500,000 in compensatory damages and $ 450,000 in punitive damages. After the verdict, P and the defendants in both actions settled P's claims. In 1983, P received $ 525,000 (after payment of costs and attorneys' fees) pursuant to the settlement agreement. Held, sec. 104(a)(2) excludes the settlement proceeds from gross income. Held, further, any portion of the settlement proceeds characterized as punitive damages are nevertheless excluded from gross income by sec. 104(a)(2).…
1Opinion of the Court
OPINION
WELLS, Judge:
Respondent determined a deficiency of $249,106 and an addition to tax pursuant to section 66611 of $62,254 against petitioner for 1983.
The instant case stems from petitioner’s receipt of $525,000 in settlement of two defamation actions. We must decide (1) whether the settlement proceeds should be excluded from gross income pursuant to section 104(a)(2), (2) whether any portion of the proceeds characterized as punitive damages should also be excluded pursuant to section 104(a)(2), and (3) whether petitioner is hable for the section 6661 addition to tax.
The facts are fully…
2Cases cited28 opinions
- United States v. American Trucking AssociationsSupreme Court of the United States · 1940
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Commissioner v. Glenshaw Glass Co.Supreme Court of the United States · 1955
- Browning-Ferris Industries of Vermont, Inc. v. Kelco Disposal, Inc.Supreme Court of the United States · 1989
- Crane v. CommissionerSupreme Court of the United States · 1947
23 more not listed; retrieve them via the Exa API.
3Cited by49 opinions
- O'Gilvie v. United StatesSupreme Court of the United States · 1996
- Robinson v. CommissionerUnited States Tax Court · 1994
- Frank E. & Mildred E. Rickel v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1990
- Bagley v. CommissionerUnited States Tax Court · 1995
- Commissioner of Internal Revenue v. Bonnie A. MillerCourt of Appeals for the Fourth Circuit · 1990
44 more not listed; retrieve them via the Exa API.