holding Roemer v. Commissioner, 79 T.C. 398 (1982), revd. 716 F.2d 693 (9th Cir. 1983), will no longer be followed by this Court and expressing agreement with the reasoning for its reversal by the Court of Appeals for the Ninth Circuit
How later courts described this case
- holding Roemer v. Commissioner, 79 T.C. 398 (1982), revd. 716 F.2d 693 (9th Cir. 1983), will no longer be followed by this Court and expressing agreement with the reasoning for its reversal by the Court of Appeals for the Ninth Circuit
- holding that compensatory damages received for malicious prosecution, including compensation for injuries to professional reputation, were excludable under section 104(a)(2)
- rejecting the bifurcation of defamation into injury to personal reputation and injury to professional reputation
- “the specific allocation contained in the settlement agreement does not necessarily control in deciding whether the claim being settled arises from a personal injury”
Written by the judges who cited it.
The opinion
SIMPSON, J., dissenting: In my opinion, the Court has, by its decision today, eliminated the word “personal” from the description of the injuries for which damages are excludable under section 104(a)(2). Many cases involve difficult questions of distinguishing between personal and business injuries and the damages attributable to them. Often, in close cases, hard lines must be drawn, but because of the way the issue is presented in this case, we are not required to draw a fine line between a personal and a professional injury. Here, we are asked to decide whether damages which are admittedly for injury to a professional reputation are excludable as a personal injury.
In Roemer v. Commissioner, 79 T.C. 398 (1982), revd. 716 F.2d 693 (9th Cir. 1983), the taxpayer was defamed, and the defamation affected him personally and professionally. There can be reasonable differences of opinion over whether defamation is a personal injury and over whether the claim should be classified as one for personal injury in view of the consequences to both the personal and professional reputations. Yet, we are presented with no similar difficulties in this case.
Here, the petitioner was awarded substantial damages for his personal injury, and no doubt the parties have agreed that those damages are excludable under section 104(a)(2). He also was awarded damages for injury stated to be to his professional reputation. Thus, there is no question over whether these damages are attributable to a personal injury. If the words of section 104(a)(2) have any meaning, they surely do not permit the exclusion of damages declared to be for injury to a professional reputation.