Sutherland v. Egger

OPINION OF THE COURT

BECKER, Circuit Judge.

The appeal in this tax refund case presents the question of whether sums paid to former Conrail workers whose employment was terminated pursuant to a termination allowance provision enacted by Congress in 1981 as part of the railroad reorganization package are excluded from federal income taxation. Ruling on a motion for judgment on the pleadings, the district court found that the payments were excluded. We reverse.

I

Plaintiffs/appellants (“taxpayers”) are twelve former Conrail workers. In 1982, they were awarded lump sums of up to $25,000 from Conrail…