Dewey v. United States

• Court: Court of Appeals for the Tenth Circuit
• Decided: March 23, 1999
• Docket: 98-8044
• Status: Unpublished

Opinion

F I L E D United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS MAR 23 1999 FOR THE TENTH CIRCUIT PATRICK FISHER Clerk

JOHN C. DEWEY,

Plaintiff-Appellant,

v. No. 98-8044 (D.C. No. 92-CV-287-J) UNITED STATES OF AMERICA, (D. Wyo.) and its agency, THE INTERNAL REVENUE SERVICE OF THE UNITED STATES,

Defendants-Appellees.

ORDER AND JUDGMENT *

Before ANDERSON , KELLY , and BRISCOE , Circuit Judges.

After examining the briefs and appellate record, this panel has determined

unanimously that oral argument would not materially assist the determination

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. The court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is

therefore ordered submitted without oral argument.

This appeal is before us for the second time. We remanded this case to the

district court for consideration in light of Commissioner v. Schleier , 515 U.S. 323

(1995). The issues in this appeal are whether a monetary settlement received by

plaintiff after a jury verdict in his favor in a lawsuit pursuant to the Age

Discrimination in Employment Act (ADEA) was excludable from gross income

under 26 U.S.C. § 104(a)(2), and whether the Internal Revenue Service (IRS)

conducted a reexamination of plaintiff’s books and records connected with his

1984 tax return in violation of 26 U.S.C. § 7605(b). We review the district

court’s grant of summary judgment in favor of defendant de novo , see Kaul v.

Stephan , 83 F.3d 1208, 1212 (10th Cir. 1996), and we affirm.

The district court was correct in its application of Schleier to this case.

The Supreme Court held in Schleier that for a recovery to be excludable from

gross income under § 104(a)(2), “the taxpayer must demonstrate that the

underlying cause of action giving rise to the recovery is based upon tort or tort

type rights; and second, the taxpayer must show that the damages were received

on account of personal injuries or sickness.” 515 U.S. at 337 (quotations

omitted). The Court held that the plaintiff’s settlement of his ADEA claim did

not satisfy both requirements, and, therefore, the settlement was not excludable

-2- from gross income. We agree with the district court that, based on Schleier ,

plaintiff’s settlement pursuant to his ADEA claim was not excludable from gross

income under § 104(a)(2). Plaintiff’s ADEA award was not based upon tort or

tort-type rights, and neither was the award received on account of personal

injuries or sickness. See Schleier, 515 U.S. at 332, 334.

The district court found that, contrary to plaintiff’s assertion, the IRS did

not reexamine plaintiff’s 1984 taxes in violation of 26 U.S.C. § 7605. Like the

district court, we recognize the government’s contention that this matter is moot

because plaintiff received a refund for the tax assessed as a result of the process

of which plaintiff complains. We do not reach the mootness issue, however,

because we agree with the district court that no second examination as

contemplated by § 7605 occurred. All the information considered by the IRS in

making the alternative minimum tax calculation on plaintiff’s 1984 tax return was

already in its possession. See Hough v. Commissioner , 882 F.2d 1271, 1275-76

(7th Cir. 1989) (holding that “use of information already in the possession of the

Commissioner is not an examination for purposes of section

-3- 7605(b)”). We affirm the grant of summary judgment on this issue for the

reasons stated by the district court.

AFFIRMED. The mandate shall issue forthwith.

Entered for the Court

Mary Beck Briscoe Circuit Judge

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