Kathleen Simpson v. Cir

MEMORANDUM ***

Kathleen Simpson settled an employment suit and received a large payout. Only a small portion of the settlement was included as income when she and her husband jointly filed their taxes the following year. The Internal Revenue Service issued a notice of deficiency, and the case proceeded to trial before the Tax Court. The Tax Court held that all but 10% of the settlement proceeds had to be included as income. The Simpsons moved for attorney fees. The Tax Court denied fees. The Simpsons timely appeal.

We review a decision of the Tax Court the same way we review any decision…