Tax Court In Brief | Dern v. Comm'r | Direct Causation A Must To Exclude From Income Damages For Injury Or Sickness, Section 104(a)(2)

Published date02 September 2022
Subject MatterEmployment and HR, Tax, Discrimination, Disability & Sexual Harassment, Employee Benefits & Compensation, Income Tax
Law FirmFreeman Law
AuthorFreeman Law

The Tax Court in Brief - August 29th - September 2nd, 2022

Freeman Law's "The Tax Court in Brief" covers every substantive Tax Court opinion, providing a weekly brief of its decisions in clear, concise prose.

For a link to our podcast covering the Tax Court in Brief, download here or check out other episodes of The Freeman Law Project.

Tax Litigation: The Week of August 29th, 2022, through September 2nd, 2022

  • Sparta Pink Property, LLC v. Comm'r T.C. Memo. 2022-88 | August 29, 2022 | Lauber, J. | Dkt. No 12114-20
  • Pressman v. Comm'r, T.C. Summ. Op 2022-15 | August 29, 2022 | Panuthos, S.T.J. | Dkt. No. 16084-19S
  • Domdom v. Comm'r, T.C. Summary Opinion 2022-17 | August 30, 2022 | Carluzzo, J. | Dkt. No 18270-17S
  • George Anton Remisovsky and Ellen Jones-Remisovsky v. Comm'r, T.C. Memo. 2022-89| August 30 2022?| Lauber, A. | Dkt. No. 11945-20L

Dern v. Comm'r, T.C. Memo. 2022-90| August 30, 2022 | Vasquez, J. | Dkt. No. 7595-20

Short Summary:

In this memorandum opinion, the Tax Court set forth its ruling based on its view of the relevant facts and points of law after holding a remote trial. The Petitioner, Thomas Dern, received a settlement in connection with a suit against his former employer. He did not report the amount he received as income or pay taxes on the amount. The IRS determined a deficiency of just under $100,000.00. Mr. Dern was a commissions-based sales representative who worked for a single manufacturer as an independent contractor. As a result of serious acute gastrointestinal bleeding and a resulting heart attack in September 2017, Mr. Dern missed a few months of work, then resumed duties working only from home in December and January. The employer asked him to resume in-person sales calls in January. He continued working only remotely. The employer then terminated Dern's sales representative agreement at the end of the month.

Dern then sued the company under California law for misclassification of employment status, wrongful termination, failure to pay wages, breach of contract, intentional infliction of emotional distress, failure to take all reasonable steps to prevent discrimination, and for several violations of the California Fair Employment and Housing Act. Those violations included disability discrimination, failure to accommodate disability, age discrimination and failure to engage in the interactive process required by that Act. Eventually, the parties entered a written settlement agreement. The employer agreed "to compensate...

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