How often have I quoted Judge Vasquez: “[T]he distillation of truth from falsehood. . . is the daily grist of judicial life.” Diaz v. Commissioner, 58 T.C. 560, 564 (1972). Mixed metaphor aside, John Henry Besaw, T. C. Sum. Op. 2025-8, filed 10/2/25, fails the distillery, as he cannot document his wife’s gambling won-and-lost record, and his trial testimony is less than stellar. Again, IRS’ paperwork is less than perfect, stating that a disallowance of deduction increases liability dollar for dollar, but STJ Diana L. (“Sidewalks of New York”) Leyden says she sustaiuns IRS’ disallowance. And while John Henry prepared his own taxes and the Code is complex, he has to do better than guess at gambling losses.

Another Section 104 physical injury case, and this is tough. Cerissa Rene Fortune-Paladino,, T. C. Memo. 2025-101 filed 10/2/25, “has suffered appalling indignities at the hands of her supervisor, the emotional scars of which clearly remain.” T. C. Memo. 2025-101, at. p. 5. The account of Ms. Fortune-Paladino’s mistreatment makes one long for the days of Kipling’s hero Strickland and the horsewhip he used on another such. Unhappily for ex-Ch J L. Paige (“Iron Fist”) Marvel “…this is not the first time that the Court has had to address the taxability of settlement proceeds in this type of case, and the law regarding the requirements for exclusion from gross income under section 104(a)(2) is quite clear. Section 104(a)(2) excludes damages that are intended to compensate for any physical harm or sickness. Ms. Paladino concedes that she did not suffer any physical harm or sickness resulting from the sexual harassment she endured, and her complaint confirms that she did not allege any physical harm or sickness. Accordingly, we conclude that the Commissioner’s determination is correct.” T. C. Memo. 2025-101, at p. 5.