Dewey v. United States ( 1999 )

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This order and judgment is not binding precedent, except under the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
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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
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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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