Green v. Comm'r

Green v. Comm'r

Opinion

MEMORANDUM OPINION

KERRIGAN, Judge: Respondent determined a deficiency of $22,983 and a penalty of $2,097 under section 6662(a) with respect to petitioners' Federal income tax for tax year 2009.

 [*2]  Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the tax year in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. We round all monetary amounts to the nearest dollar.

After concessions, the remaining issues for consideration are (1) whether any part of the $100,000 petitioner wife received in the settlement of a lawsuit against her former employer is excludable from income under section 104(a)(1) or (2) and (2) whether petitioners are liable for the accuracy-related penalty under section 6662(a).¹

Background

This case was fully stipulated under Rule 122. The stipulated facts are incorporated in our findings by this reference. Petitioners resided in Virginia when they filed the petition.

In April  [**2] 2002 petitioner wife suffered an on-the-job injury to her neck and back while working as a waitress at the Greenbriar Hotel (former employer) in West Virginia.² She received worker's compensation total disability benefits from  [*3]  April 12, 2002, through November 24, 2003.³ On September 30, 2002, petitioner wife received a release to return to work, and she returned to work briefly in October 2002. In March 2003 petitioner wife received a second release to work. Her former employer required that she take a functional capacity exam (FCE) before returning to work. On June 11, 2003, an FCE was held. She did not pass the FCE and did not meet the physical demands of her previous position. Her former employer did not have an alternative position available.

Petitioner wife underwent two additional FCEs and was not cleared to return to her prior position. The third and final FCE showed some health concerns which resulted in a recommendation for petitioner wife to follow up  [**3] with her personal physician. This led to her employment's being terminated on November 8, 2004.

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