Taylor Miller - Page 12




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          supports the proposition that back wages for what might be                  
          regarded as a tort-like injury, e.g. discrimination on account of           
          age, race, disability, or sex, are taxable unless it can be shown           
          that (a) the discrimination caused physical or psychological                
          injury, and (b) the loss of pay was due to a physical or                    
          psychological injury, not just the discriminatory action of the             
          employer.4                                                                  
               Schleier became the law of the land applicable to all                  
          pending cases.  When the U.S. Supreme Court announces a rule of             
          law and applies it to the litigants in the case announcing the              
          rule, that rule applies retroactively to all other pending cases            
          unless barred by the statute of limitations or res judicata.  See           
          Harper v. Virginia Dept. of Taxation, 509 U.S. 86, 97 (1993);               
          James B. Beam Distilling Co. v. Georgia, 501 U.S. 529, 540-541,             
          544 (1991).  Consistently with this view, the Tax Court has                 
          applied Schleier to taxable years antedating the Supreme Court’s            
          opinion therein.  See, e.g., Bagley v. Commissioner, 105 T.C. 396           
          (1995), affd. 121 F.3d 393 (8th Cir. 1997); Green v.                        
          Commissioner, T.C. Memo. 1998-274; Goeden v. Commissioner, T.C.             
          Memo. 1998-18; Wise v. Commissioner, T.C. Memo. 1998-4; Kroposki            


               4 It is noteworthy that the Supreme Court in Schleier v.               
          Commissioner, 515 U.S. 323, 336 n. 8 (1995) cast doubt on the               
          Commissioner’s reading of United States v. Burke, supra, in Rev.            
          Rul. 93-88, 1993-2 C.B. 61.  In Notice 95-45, 1995-2 C.B. 330,              
          the Commissioner suspended Rev. Rul. 93-88; in Rev. Rul. 96-65,             
          1996-2 C.B. 6, the Commissioner obsoleted Rev. Rul. 93-88.                  





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