- 8 - without published opinion 676 F.2d 682 (1st Cir. 1982). In order to exclude a settlement or a recovery, a taxpayer mustdemonstrate (1) that the underlying cause of action giving rise to the settlement or recovery is based upon tort or tort-type rights and (2) that the damages were received on account ofpersonal injuries or sickness. Commissioner v. Schleier, 515 U.S. at ,115 S. Ct. at 2167. Respondent argues that (1) there is no underlying cause of action giving rise to a settlement or recovery; i.e., the ITOpayment or allowance does not constitute "damages", and (2) IBMdid not pay petitioner the ITO allowance on account of personal injury. Petitioner contends that because the ITO payment was in exchange for the Release which included tort claims and was intended to avoid litigation, it was a tort settlement.Petitioner also contends that the ITO allowance was paid on account of personal injury, since the loss of a job gives rise tostress-related medical expenses, lost wages, and pain and suffering, just as the typical personal injury described in Commissioner v. Schleier, 515 U.S. at , 115 S. Ct. at 2163-2164, does. Petitioner states that it took him 1-1/2 years tosecure full-time employment. At the time petitioner signed the Release, he had made noclaims against IBM. The Release was not the result of settlement negotiations between petitioner and IBM. Indeed,Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
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