Turner Broadcasting wrong to include comp payments as taxable income

A federal appellate court reversed a lower court ruling involving an injured photojournalist who claims his employer improperly included on W2 statements income that he says was not taxable because it came from non-taxable workers compensation payments.  

The U.S. Court of Appeals, District of Columbia Circuit Friday sided with Martin Doherty in his lawsuit against Turner Broadcasting Systems Inc.

Mr. Doherty collected workers comp benefits for years following work-related injuries.

He later sued Turner over claims the company filed fraudulent information returns on his behalf in 2014, 2015 and 2016. Mr. Doherty said the returns overstated his taxable income and that Turner’s actions were willful because it either knew, or should have known, the payments were for comp benefits and not regular income.

A lower court sided with Turner, determining the returns accurately reflected the total amount of compensation Turner paid Mr. Doherty during those years, and finding that “no reasonable jury could conclude Doherty was being paid under the D.C. Workers’ Compensation Act,” according to the appellate ruling.

In reversing, the appellate court found a reasonable jury could conclude the W2s were inaccurate since they overstate taxable income by including comp payments.

The appellate court reinstated the lawsuit and remanded the case to the lower court for further proceedings.