Norris O. and Betty J. Whitley - Page 12

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          Although petitioner states correctly that one or more courts had            
          adopted positions that were ultimately rejected by the U.S.                 
          Supreme Court in deciding those cases, that does not mean, as               
          petitioner asks us to hold, that we should apply the prior                  
          positions in lieu of the high Court's decisions.  According to a            
          recent mandate of the Court on the retroactive effect of its                
               When this Court applies a rule of federal law to the                   
               parties before it, that rule is the controlling                        
               interpretation of federal law and must be given full                   
               retroactive effect in all cases still open on direct                   
               review and as to all events, regardless of whether such                
               events predate or postdate our announcement of the                     
               rule.  * * *  [Harper v. Virginia Dept. of Taxation,                   
               509 U.S. 86, 97 (1993).]                                               
               We apply the Supreme Court's decisions in O'Gilvie,                    
          Schleier, and Burke to hold that petitioner's punitive damages              
          are includable in his gross income.  In so holding, we have                 
          considered all arguments made by petitioner and, to the extent              
          not discussed above, find them to be without merit.  To reflect             
          the foregoing,                                                              
                                                  Decision will be entered            
                                             for respondent.                          

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