Michael M. Brennan - Page 8

                                        - 8 -                                         

          T.C. 77 (1964); Starrels v. Commissioner, 35 T.C. 646 (1961),               
          affd. 304 F.2d 574 (9th Cir. 1962).  Such holdings imply that               
          there must be an existing claim.  Moreover, while it need not               
          have been previously asserted, the absence of any knowledge of              
          the claim on the part of the employer-payor obviously has a                 
          negative impact in determining the requisite intent of the                  
          payment.  Sodoma v. Commissioner, T.C. Memo. 1996-275; see also             
          Keel v. Commissioner, T.C. Memo. 1997-278; Foster v.                        
          Commissioner, T.C. Memo. 1996-26.                                           
               Petitioner asserts that he had a bona fide claim against IBM           
          for infliction of emotional distress caused by his travel                   
          schedule and pressures at work, and therefore IBM accepted                  
          petitioner's ITO II Program participation request and subsequent            
          release in lieu of litigation.  Petitioner claims that his                  
          position is supported by the fact that he filed informal claims             
          and/or grievances against IBM pursuant to the company's own                 
          internal programs (e.g., Open Door Policy).  Respondent argues              
          that petitioner's failure to lodge any formal tort-type claim               
          against IBM prior to and at the time of signing the release                 
          establishes that there was no bona fide dispute between                     
          petitioner and IBM that could provide the basis for settlement.             
               We disagree.  An employee is not always required to file a             
          formal legal action against an employer prior to settling an                
          existing claim in order to exclude such settlement payment from             





Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next

Last modified: May 25, 2011