[DO N OT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

__ __ __ __ __ __ __ __ __ __ __ __ No. 1 2- 11 33 7 Non -Arg um en t Ca le nd ar

__ __ __ __ __ __ __ __ __ __ __ __ Agen cy No. 5 08 0- 10 SYED A. AH MED, RAFIUNNISA R. AHMED, ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll qq qq qq Pet it io ne rs -Ap pe ll an ts , ve rs us COMM ISSI ONER OF IRS, ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll l l Res po nd en t-Ap pe ll ee.

__ __ __ __ __ __ __ __ __ __ __ __ Pet it io n fo r Rev ie w of aDeci si on of t he

U.S.Tax Co urt

__ __ __ __ __ __ __ __ __ __ __ __ (No ve m be r 21 , 20 12 ) Befo re CARNES, BAR KETT andFAY, Circ ui t J ud ge s. PER CURI AM:

Case: 12-11337 Date Filed: 11/21/2012 Page: 1 of 10Sy edAhm ed , pro ceed in g pr o s e , app eal s t he tax co urt’s d en ia l o f hi s 1 pe ti ti on forred et erm in at io n o f hi s t ax de fic ie nc y , im po se d fo r hi s fa il ur e to pa y ta xe s o n aset tl em en t p aym en t tha t h e rec ei ve d re la te d t o a n e m pl oym en t di sc riminat io n l aws ui t. Onap pe al , he a rg ue s t ha t the set tl em en t p aym en t i s ex cl ud ab le fro m

hi s t ax ab le gro ss in co m e, un de r 26 U.S.C. § 1 04 (a)( 2) , as co m pe ns at io n fo r ph y si cal in

juri es or p hysic al si ckne ss . For the reas on s s etforth be lo w, we affi rm

th e ta x c ou rt’s d en ia l o f Ahm ed ’s pet it io n c ha ll en gi ng hi s t ax de fic ie nc y . I. In20 10 , Ahm edfil eda pe ti ti on with t he tax co urt s eek in g ared et erm in at io n of th e Co m m is si on er’s d eci si on th athe ha d atax de fic ie nc y in20 07 . He att ach ed th e n ot ic e o f de fic ie nc y , whi chin di cat edth athe owed$2 2,1 85 intax es on $9 0,0 00 of i nc om e fo r 20 07 . The Co m m is si on er al so im

po se d a$4 ,43 7 p en al ty ba se d o n Ah m ed ’s subs ta nt ia l u nd ers ta te m en t o f ta x, und er 2 6 U.S.C. § 66 62 (a). Inhi s p et it io n, Ah m edass ert edth atth e $ 90 ,00 0 was “ no t i nc om e b ut[a] se tt le m en t o f le ga l ex pe ns es ov er a p eri odof 1 6 years i n [a ] di sc riminat io n c as e.” The pa rti es ’ st ip ul at io n o f th e fac ts , alo ng with t he ir a tt ach edex hi bi ts , Although Sy ed and Rafiunnisa Ahmed are both pa rties on appea l, the fac tual background 1 and issues on appe al re late solely to Sy ed Ahmed, a

nd acc ording ly , we r efe r only to him. 2 Case: 12-11337 Date Filed: 11/21/2012 Page: 2 of 10es tabl is he d t ha t, o n Oct ob er 2 3, 2 00 6, Ah m edha d fi le d aciv il co m pl ai ntag ai ns t Fu lt on Co un ty, hi s fo rm er em pl oyer, all eg in g n um ero us cla im s, i nc lu di ng co ns ti tu ti on al vi ol at io ns , di sc riminat io n, an d re ta li at io n, b as edon hi s ra ce, rel ig io n, an d n at io na l o rig in , invi ol at io n o f Tit le VII of th e Ci vi l Ri gh ts Act o f 19 64 an d 4 2 U.S.C. § 19 81 , andag e d is cri min at io n, i n v io la ti on of the Age Dis cri m in at io n a ndEm

pl oym en t Act(“ ADEA”). Am on g o th er thi ng s, h e al le ge d th atth e h aras sm en t tha t h e su ffer eddu rin g h is em pl oym en t co nt rib ut edto a he art at ta ck th athe su ffer edon Aug us t 2 4, 2 00 5. As to rel ie f, Ahm edreque st edba ck pa y , bac k b en efi ts , com

pe ns at ory an d p un it iv e d am ag es for in te nt io na l di sc riminat io n, l it ig at io n e xp en se s, an d re as on ab le att orne y ’s fees . On Oct ob er 1 0, 2 00 7, Ah m eden te redin to a se tt le m en t ag reem en t wi th Fu lt on Co un ty, pu rs ua ntto whi ch he ag reedto di sm is s h is em pl oym en t l aws ui t i n ex ch an ge for$1 50 ,00 0. Ah m edals o a gr eedto ret ire fro m hi s emplo y

m en t wi th th e Co un ty. The a gr eem en t i nd ic at edth atiten co m pa ss edall cla im s ar is in g fr om Ahm ed ’s civ il act io n, i nc lu di ng : an y an d a ll real or p erce iv edcla im s, o bl ig at io ns , pro m is es , dem an ds , rig ht s, d am ag es , cos ts [,] lo ss es , su it s, ac ti on s, at to rn ey s’ fees an d ex pe ns es of a ny natur e wha ts oe ve r whi ch AHMED m ay ha ve or h av e ha d, o r m ay

lat er cl ai m

to ha ve ha d, ag ai ns t an y

of t he FULTON COUNTY RELEASEE S fo r pe rs on al in juri es , con tra ctua l d am ag es , lo ss es an d d am ag e to pe rs on al pro pe rty, or an y ot he r lo ss es or ex pe ns es of a ny kin d. 3 Case: 12-11337 Date Filed: 11/21/2012 Page: 3 of 10Ahm ed ’s att orne y inth e cas e co ll ect eda 40 % fee fr om th e to ta l s et tl em en t pa ym en t, wh ic h was $6 0,0 00 , andth e rem ai ni ng $9 0,0 00 was d ep os it edto Ahm ed ’s ban k a cco un t. At the tri al , Ahm edtes ti fie d t ha t h e “ se tt le d the cas e b ecau se of p hysic al in juri es .” Furth er, h e te st ifi edth atFu lt on Co un ty hadalr eady gi ve n h im

ba ckpa y fo r th e ti m e p eri odof Au gu st4 t o J anua ry 20 , 20 05 , andAhm edpa idtax es on th os e earni ng s i n h is 20 05 tax return. Fu rth er, h e st at ed , “ th enwhatwe go t was $9 0,0 00 form

y he artatt ackan d t he su ffer in gs of my who le fam il y

an d my se lf.” Ahm eddi d n otin cl ud e th e se tt le m en t as tax ab le in co m e inhi s 2 00 7 t ax return be cau se th e In te rn al Rev enue Serv ic e h as in stru ct edtax pa y ers to ex cl ud e

“ co m pe ns at ory da m ag es forpe rs on al ph y si cal in jury or ph y si cal si ckne ss .” The co urt i ss ue d a n o pi ni on de nyin g Ah m ed ’s pet it io n. Th e co urt fo un d th at , alt ho ug h t he set tl em en t ag reem en t re fere nc ed“pe rs on al in juri es ” in a

“bo il erp la te li st ” o f al l the cla im s fr om whi ch Ahm edag reedto rel eas e Fu lt on Co un ty, th e se tt le m en t d idno t al lo cat e an y po rti on of t he pa ym en t t o c om pe ns at e hi m forph y si cal in

juri es . Furt he r, as pa rt o f th e se tt le m en t ag reem en t, Ah m ed ag reedto ret ire fro m

hi s emplo ym en t, wh ic h s ug ge st s t ha t atlea stpa rt o f th e se tt le m en t p aym en t s ho ul d b e co ns id eredas s ev eran ce p ay . Alth ou gh th e co m pl ai ntm en ti on edAhm ed ’s ph y si cal in juri es , th e co m

pl ai ntdi d n otsp eci fic al ly 4 Case: 12-11337 Date Filed: 11/21/2012 Page: 4 of 10se ekrel ie f fo r th os e in juri es . Mor eo ve r, th e co m pl ai ntne ve r co nn ect edAhm ed ’s he artatt ackor o th er p hysic al in juri es to hi s cl ai m s fo r da m ag es . Thu s, the tax co urt co nc lu de d t ha t Ah m edfai le d t o p ro ve th atFu lt on Co un ty int en de d t o co m pe ns at e h im

forph y si cal in

juri es , gi ve n t ha t the co m pl ai nt“pl acedli tt le em ph as is ” o n h is ph y si cal in juri es , th e se tt le m en t ag reem en t’s o nl y m en ti on of

“pe rs on al in

juri es ” was inth e b oi le rp la te lan gu ag e, an d t he reco rdco nt ai ne d n o ot he r ev id en ce s ho win g tha t an y pa rt o f th e se tt le m en t was forph y si cal in juri es . Acco rd in gl y , th e ta x c ou rt s us ta in edth e Co m m is si on er’s d et erm in at io n t ha t the $9 0,0 00 th atAhm edrece iv edun de r th e se tt le m en t ag reem en t i s t ax ab le . The t ax co urt al so su st ai ne d atax pe na lt y th atAhm edin curredfor

a subs ta nt ia l un de rs ta te m en t o f in co m e ta x, as he fai le d t o ra is e th e is su e attri al . II. As a p rel im in ary m atte r, th e Co m m is si on er, i n i ts res po ns e b rie f, arg ue s t ha t th e ta x c ou rt p ro pe rly su st ai ne d Ah m ed ’s tax pe na lt y fora subs ta nt ia l un de rs ta te m en t o f ta xabl e in co m e, an d re ga rd le ss , he wai ve d a ny chal le ng e to hi s ta x p en al ty becau se he fai le d t o c ha ll en ge th e p en al ty in h is pe ti ti on be fo re the tax co urt. Ho wev er, ev enif h e h adpre se rv edsu ch a ch al le ng e, Ahm edha s ab an do ne d itonap pe al be cau se , alt ho ug h h e m ak es two pa ss in g re fere nc es to th e p en al ty, he pr ov id es no arg um en ts rel at edto th e p en al ty iss ue inhi s ap pe al bri ef. Se e Ti mso n 5 Case: 12-11337 Date Filed: 11/21/2012 Page: 5 of 10v. Sa mps on , 51 8 F .3d87 0, 8 74 (11 th Cir . 20 08 ) (h ol di ng th atis su es no t b rie fedon

ap pe al by a pr o s e li ti ga ntare d eem edab an do ne d) . In h is st at em en t o f th e is su es , Ahm edst at es , “ [I]n Tax Return o f 20 07 [, he ] cl earl y m en ti on edab ou t the se tt le m en t, NO pe na []lty be le vi ed .” Add it io na ll y , inhi s s ta te m en t o f fac ts , he in di cat es th at , bec au se th e se tt le m en t was pro m in en tl y no te d o n h is tax returns ,

“ th e que st io n o f pe na []lty doe s n otari se .” Thes e st at em en ts do no t cl earl y art ic ul at e a ch al le ng e to th e ta x c ou rt’s d et erm in at io n tha t Ah m edha d wai ve d t he ta x p en al ty iss ue by fail in g t o ra is e itat t ria l. Acco rd in gl y , he h as ab an do ne d a ch al le ng e to th e p en al ty on app eal . Se e Ti mso n , 51 8 F .3dat 8 74 . III. W e rev ie w th e ta x c ou rt’s fa ctua l fi nd in gs forcle ar erro r an d i ts leg al co nc lu si on s de no vo . Estat e o f Whit t v. Co mm’r o

f In te rn al Reven ue , 75 1 F .2d 15 48 , 15 56 (11 th Cir . 19 85 ). The C omm is si on er’s d et erm in at io n o f a d efi ci en cy is pr es um edco rrec t an d t he tax pa y er h as th e b ur de n o f pr ov in g b y a pr ep on de ran ce of th e ev id en ce tha t i t i s i nc orrect . Id. W e rea d b rie fs fil edby pr o s e li ti ga nt s li be ral ly. Ti mso n , 51 8 F .3dat 8 74 . The Six te en th Am en dm en t t o t he U.S. Con st itut io n p ro vi de s t ha t “ Co ng res s sh al l h av e p owe r to lay andco ll ecttax es on in co m es , fro m what ev er s ou rce de riv ed .” U.S. C O N S T . am en d. XVI. The Int ern al Rev enue Co de (“ IRC” ) im po se s 6 Case: 12-11337 Date Filed: 11/21/2012 Page: 6 of 10a ta x o n t he tax ab le in co m e o f ev ery in di vi du al who is a ci ti zen or r es id en t o f th e

Uni te d S ta te s, wi th so m e ex cep ti on s n otap pl ic ab le he re. 2 6 U.S.C. § 1(a )-(d ); 2 6 C.F.R. § 1.1 -1 (a). Tax ab le in co m e is gro ss in co m e le ss de du ct io ns . 26 U.S.C. § 6 3( a). Sec ti on 61 (a) o f th e IRC de fin es gro ss in co m e b ro ad ly, st at in g t ha t

“ [e]xce ptas o th erwi se pro vi de d i n t hi s s ub ti tl e, gr os s i nc om e m ean s al l i nc om e fro m what ev er s ou rce d eri ve d.” Co mm’r o f In te rn al Reven ue v. Sc hl ei er , 51 5 U.S. 32 3, 3 27 , 11 5 S .Ct. 2 15 9, 2 16 3, 1 32 L.Ed. 29 4( 19 95 ); 2 6 U.S.C. § 61 (a). Th e Supr em e Co urt h as “ rep eat ed ly em ph as iz edth e ‘sweep in g s co pe ’ of th is sec ti on ,” an d t ha t “ ex cl us io ns fro m in co m e m

us t b e n arro wly co ns tru ed .” Id. at 3 27 -2 8, 1 15 S.Ct . at 2 16 3. Sect io n 1 04 (a)( 2) of the IRC ex pr es sl y pro vi de s t ha t “ gr os s i nc om e” d oe s no t i nc lu de : th e am ou ntof a ny dam ag es (ot he r th anpu ni ti ve da m ag es ) rec ei ve d (wh ethe r by su itor a gr eem en t an d wh ethe r as lu m p s um s o r as pe rio di c p aym en ts ) on acco un t o f pe rs on al ph y si cal in juri es or ph y si cal si ckne ss . 26 U.S.C. § 1 04 (a)( 2) . In Sc hl ei er , th e Supr em e Co urt re jecte d atax pa y er’s cl ai m th atba ckpa y

th athe rece iv edun de r anADEA sett le m en t was ex lc ud ab le fro m gr os s i nc om e u nd er § 10 4( a)(2 ), co nc lu di ng th athi s re co ve ry of t he ba ckpa y

was no t “ on acco un t o f” an y

pe rs on al in

jury andno pe rs on al in

jury affect edth e am ou nt

7 Case: 12-11337 Date Filed: 11/21/2012 Page: 7 of 10of

ba ckpa y reco ve red . Sc hl ei er , 51 5 U.S. at32 7- 31 , 11 5 S .Ct. at21 63 -6 4. Here, the tax co urt d idno t cl earl y err i n c on cl ud in g tha t Ah m ed ’s $9 0,0 00 se tt le m en t p aym en t was no t ex cl ud ab le fro m hi s t ax ab le in co m e und er § 10 4( a)(2 ). As n ot edby the tax co urt, the Co m m is si on er’s d et erm in at io n o f Ahm ed ’s tax de fic ie nc y

is pre su m edco rrec t, an d Ah m edha d t he bu rd ento sh ow tha t the pa ym en t was rece iv edinco m pe ns at io n fo r ph y si cal in

jury or si ckne ss . Se e Est at e of W hi tt , 75 1 a t 1 55 6. A rev ie w of t he reco rdco nf irms th atAhm edfai le d t o m eet th is bu rd en . Und er the set tl em en t ag reem en t, n o p orti on of t he $1 50 ,00 0 p aym en t was sp eci fic al ly des ig na te d a s co m pe ns at io n fo r a p hysic al in jury or si ckne ss . In st ead , th e ag reem en t was in te nd edto rel eas e Fu lt on Co un ty from a br oa d a rray of po te nt ia l fu tu re cl ai m s t ha t m ig htari se ou t o f Ahm ed ’s em pl oym en t di sc riminat io n l aws ui t. Whil e th e ag reem en t re fere nc ed“pe rs on al in juri es ” in a li stof s ev eral types of t he se po te nt ia l cl ai m s, the ag reem en t d idno t re fere nc e an y sp eci fic ph y si cal in

jury or si ckne ss or m ed ic al co st s. Th e ag reem en t s pe ci fie d on ly tha t the set tl em en t p aym en t was inex ch an ge forAhm ed ’s agr eem en t t o di sm is s h is em

pl oym en t d is cri min at io n l aws ui t an d t o re ti re fro m em pl oym en t. Not ab ly, al th ou gh Ahm ed ’s com pl ai ntinhi s d is cri m in at io n l aws ui t as se rte d t ha t hi s h eartatt ackwas i nduc edby Ful to n C ou nt y , he d idno t s pe ci fic al ly seek da m ag es foran y

ph y si cal in

juri es or m ed ic al ex pe ns es .

8 Case: 12-11337 Date Filed: 11/21/2012 Page: 8 of 10Add it io na ll y , whi le th e Co un ty, in 20 05 , pro po se d t o p ay Ahm edsi x wee ks of ba ckpa y forth e ti m e “ su rro un di ng hi s h eartatt ack ,” th is pro po sa l was m ad e be fo re Ah m edin it ia te d t he 20 06 di sc riminat io n l aws ui t tha t re su lt edinth e 2 00 7 se tt le m en t p aym en t. Mo reo ve r, Ahm edsu ffer edhi s h eartatt ackon Aug us t 2 4, 20 05 , andhe tes ti fie d t ha t, i n 2 00 5, h e h adrece iv edba ckpa y forth e ti m e b etween Aug us t an d J anua ry . Thu s, Fu lt on Co un ty alrea dy com pe ns at edAhm edin20 05 fo r th e wag es th athe lo st“ onacco un t o f” h is he artatt ack , anditdo es no t ap pe ar th athi s h eartatt ackwou ldha ve affe ct edth e am ou ntof a ny backpa y th athe rece iv edun de r th e 2 00 7 s ettl em en t ag reem en t. Se e S ch le ie r , 51 5 U.S. at32 7- 29 , 11 5 S .Ct. at21 63 -6 4. On ap pe al , Ahm edarg ue s t ha t the tax co urt erredinfin di ng th atth e se tt le m en t was in te nd edas s ev eran ce b ecau se he en joy edful l re ti rem en t b en efi ts . Howev er, as no te d b y

th e ta x c ou rt, t he set tl em en t ag reem en t s pe ci fie d t ha t the $1 50 ,00 0 p aym en t was co nt in ge nton Ahm ed ’s agr eem en t t o re ti re. Ahm ed pr ov id es no ex pl an at io n fo r hi s s ug ge st io n t ha t the pay m en t ca nn otbe co ns id ered as sev eran ce b ecau se he rece iv edret ire m en t b en efi ts . Ahm edfurth er ar gu es th at , ev enif the $9 0,0 00 set tl em en t p aym en t was tax ab le , th e ta xabl e am ou ntsh ou ldbe reduc edby the $5 0,0 00 of l eg al ex pe ns es th athe in cu rredov er a 1 2- y ear p eri od . Howev er, the pa rti es st ip ul at edth at , ou t o f th e $ 15 0,0 00 to ta l s et tl em en t p aym en t, 9 Case: 12-11337 Date Filed: 11/21/2012 Page: 9 of 10th e Co m

m is si on er ex cl ud edth e $ 60 ,00 0 t ha t Ah m ed ’s att orne y rece iv ed , and im po se d atax de fic ie nc y

on ly on the rem ai ni ng $9 0,0 00 th atAhm edrece iv ed . Ahm edfai ls to ex pl ai n h ow an y ot he r le ga l fe es th athe in cu rredrel at edto th e 20 07 set tl em en t. Fi na ll y , Ahm edass ert s t ha t the tax co urt i gn or edm uc h o f th e factua l re co rdan d re li edon in co rrec t fa ct s. Ho wev er, h e fai le d t o p ro vi de an y sp eci fic ex am

pl es of e vi de nc e th atth e ta x c ou rt i gn or edor a ny facts th atit im pr op erl y pre su m edto be co rrec t. Insu m , he f ai le d t o m eethi s b ur de n t o s ho w by a prep on de ran ce o f th e ev id en ce tha t the set tl em en t p aym en t was in te nd edto co m pe ns at e h im

forph y si cal in

jury or si ckne ss . Se e Est at e o f Whit t , 75 1 a t 1 55 6. Fo r th e fo reg oi ng reas on s, we af firm th e ta x c ou rt’s d en ia l o f Ahm ed ’s pe ti ti on ch al le ng in g h is tax de fic ie nc y . AFFIRMED.

10 Case: 12-11337 Date Filed: 11/21/2012 Page: 10 of 10