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Turner Broadcasting’s Error in Including Compensation Payments as Taxable Income



A federal appeals court overturned a lower court ruling involving an injured photojournalist who claims his employer wrongly included in his W2 statements income that he says was not taxable because it came from non-taxable compensation payments.

The United States Court of Appeals for the District of Columbia Circuit on Friday sided with Martin Doherty in his lawsuit against Turner Broadcasting Systems Inc.

Mr. Doherty collected workers’ compensation benefits for years after work-related injuries.

He later sued Turner over allegations that the company submitted fraudulent information on his behalf in 2014, 2015 and 2016. Mr. Doherty said the returns overstated his taxable income and that Turner̵

7;s actions were intentional because it either knew or should have known the payments were for compensatory benefits and not ordinary income.

A lower court sided with Turner, determining that the return accurately reflected the total amount of compensation Turner paid Mr. Doherty during those years, finding that “no reasonable jury could conclude that Doherty was paid under the DC Workers’ Compensation Act,” according to the appeal decision.

In reversing, the Court of Appeals found that a reasonable jury could conclude that the W2s were incorrect because they overstated taxable income by including compensation payments.

The Court of Appeal reopened the lawsuit and referred the case back to the lower court for further proceedings.


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