No, not an award from the Bureau of Prisons. Michael Smith, T. C. Memo. 2026-25, filed 3/19/26, is imprisoned in one tax year by Section 86(d)(2)(A).

Mr. Smith applied for and got SSDI. But in the year wherein he was paid both a lump sum and periodic payments he was also gainfully employed. SSA wanted our money back, so Mr. Smith paid it back over the following two (count ’em, two) years.

He never reported the SSDI payments in the year received.

Mr. Smith says it’s like he was loaned money (nontaxable) which he paid back, but the statute forecloses Judge Albert G. (“Scholar Al”) Lauber from seeing it that way.

“We understand why petitioner views his predicament in this way, but this Court is bound by the provisions of the Code. Petitioner does not dispute that he received SSDI benefits in 2022, and he must include those payments in gross income to the extent provided in section 86. His repayments during 2023 and 2024 do not affect his 2022 tax liability because the payments he received during 2022 are reduced only by ‘any repayment made by the taxpayer during the taxable year.’ § 86(d)(2)(A) (emphasis added). This rule is one example of the ‘annual accounting principle’ that governs computation of taxable income generally.” T. C. Memo. 2026-25, at p. 4.

Generally (love that word!), each year stands on its own.

Claim of right is also barred by the explicit words of the statute.