Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

This appeal stemmed from a construction firm's attempt to obtain a refund of federal employment taxes and an abatement of interest and penalties. At issue was whether remittances of employment withholding taxes by plaintiff constituted tax payments or deposits. The court held that the district court correctly determined that the remittances were payments and refunds of these payments were subject to the time limitations of 26 U.S.C. 6511.

Petitioner appealed the Tax Court's ruling that her settlement proceeds, received as a result of a discrimination suit against her employer, was taxable income in 2006. At issue was whether the $50,000 lump sum payment to "resolve and settle all differences, disputes, and controversies between the parties" in an action concerning various employment-related claims was excludable from a taxpayer's income under Internal Revenue Code 104(a)(2). The court held that the Tax Court did not err in concluding that the settlement proceeds were income where petitioner failed to demonstrate that her employer intended to allocate any specific portion or the entire amount of the settlement for her personal physical injury or physical illness.