Marsha M. Bland - Page 1
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T.C. Memo. 2000-98
UNITED STATES TAX COURT
MARSHA M. BLAND, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 24846-97. Filed March 22, 2000.
In connection with a corporate reorganization and
consequent termination of her employment, P
participated in an enhanced severance program offered
to eligible employees. Under this program, P received
a lump-sum payment, calculated based upon rate of pay
and years of service, in return for signing a general
release of all claims against her employer. An
identical payment formula was applied and release
document signed in the case of each participating
employee. P excluded this payment from income, and R
determined a deficiency for taxes attributable thereto.
P contends that the payment was received in settlement
of and to compensate for emotional distress she
suffered as a result of sexual harassment in the
workplace and, therefore, is excluded from income
pursuant to sec. 104(a)(2), I.R.C.
Held: The payment received by P is not excludable
from income under sec. 104(a)(2), I.R.C., as damages
received on account of personal injuries or sickness.
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