-8- prerequisite steps would the settlement payment be sent. By requiring petitioner to take these steps, Universal was in fact buying their release from having to fully litigate petitioner's discrimination claims. While the Court does not dismiss the illnesses that petitioner experienced during her employment, the evidence supports the conclusion that the settlement payment was intended by Universal to be nonwage income and not to compensate petitioner for any physical injuries or physical sickness. Since the Court has found that the settlement proceeds were not based on personal physical injuries or physical sickness, there is no need to determine whether "the underlying cause of action giving rise to the recovery * * * [was] 'based upon tort or tort type rights.'" Commissioner v. Schleier, 515 U.S. at 337 (quoting section 1.104-1(c), Income Tax Regs.). The Court holds that the $50,000 damage award is not excludable from gross income under section 104(a)(2). Penalty Under Section 6662(a) The Commissioner has the "burden of production in any court proceeding with respect to the liability of any individual for any penalty" under section 6662(a). Sec. 7491(c); Higbee v. Commissioner, 116 T.C. 438, 446-447 (2001). To meet this burden, the Commissioner must come forward with sufficient evidence indicating that it is appropriate to impose the penalty. HigbeePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011