In re FedEx Ground

The District Court for the Nothern District of Indiana denies a motion for immediate appeal of 12 consolidated cases filed against FedEx Ground. The question before each of the consolidated cases was whether FedEx drivers were independent contractors or employees, the latter of which would subject the company and drivers to state and federal employment taxes.

Read the decision here:
In re FedEx Ground, No. 3:05-MD-527 RM (N.D. Ind. Feb. 11, 2011)

Fifth Circuit: Overstated Basis is Not Omitted Income for the 6-Year Statute of Limitations

The hits keep on coming. The Fifth Circuit joins the growing chorus from the Courts of Appeals holding that an overstatement of basis does not equal an omission of income and the 6 year statute of limitations does not apply.

Read the opinion here:
Burks v. United States, No. 09-11061 (5th Cir. Feb. 9, 2011)

4th Circuit: 6 Year Statute of Limitation Does Not Apply to Overstatement of Basis

The Fourth Circuit Court of Appeals joins two other circuits holding that the 6 year statute of limitations does not apply to an overstatement of basis.

Read the opinion here:
Home Concrete & Supply v. United States, No. 09-2353 (4th Cir. February 7, 2011)

Tax Court: Punitive Damages are Still Subject to Income Tax

The Tax Court rules that punitive damages still are not excluded from tax.

Petitioner argued that the punitive damages received should be subject to the exclusion from income for amounts received for personal injures or sickness from health of accident insurance (Section 104(a)(3). Petitioner argued that “but for” the injury, which was covered by accident insurance and from which the proceeds were paid, the punitive damages would not have been paid. Petitioners offered the alternative argument that the damages were not punitive, but rather were “bad faith damages.” The Tax Court rejected both arguments.

Read the opinion:
Greenberg v. Commissioner TC Memo. 2011-18