Estate of Moore v. Commissioner

ROBERT M. PARKER, Circuit Judge:

The Commissioner of Internal Revenue (the Commissioner) appeals from a decision of the United States Tax Court that punitive damages awarded under Texas law in a malicious prosecution suit are excludable from gross income under 26 U.S.C. § 104(a)(2). 1 After this case was briefed and argued, we released our opinion in Wesson v. U.S., 48 F.3d 894 (5th Cir.1995), in which we held that § 104(a)(2) does not exclude noncompensato-ry punitive damages such as those awarded under Mississippi law from gross income. Most of the issues raised by the parties were answered…