Joyce M. and Thomas J. Hamm - Page 6

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          International, Inc., showing wages of $2,650 and no Federal                 
          income tax withheld for that year.  On their 1992 joint Federal             
          income tax return, petitioners reported $61,040.31 as wage income           
          (line 7).  Petitioners attached to their return a Form 8275                 
          Disclosure Statement asserting that the ITO payment in the amount           
          of $71,809.69 was excludable from their gross income pursuant to            
          section 104(a)(2) "as a payment received in exchange for the                
          release and settlement of tort-type rights, as part of IBM                  
          Corp.'s ITO II Program".                                                    
               Respondent determined that petitioners did not establish               
          that any amount was excludable from their gross income pursuant             
          to section 104(a)(2).  Consequently, respondent increased                   
          petitioners' gross income by $74,131.29 to conform to the amounts           
          reported on petitioner's Forms W-2.  Additionally, respondent               
          disallowed itemized deductions in the amount of $966.08 as an               
          automatic adjustment resulting from the increase in petitioners'            
          gross income.                                                               
               The instant case is another among many in this Court where             
          we have been presented with the issue of whether proceeds                   
          received pursuant to IBM's ITO II program are excludable from the           
          recipient's gross income pursuant to section 104(a)(2).  See,               
          e.g., Gajda v. Commissioner, T.C. Memo. 1997-345; Lubart v.                 
          Commissioner, T.C. Memo. 1997-343; Thorpe v. Commissioner, T.C.             
          Memo. 1997-342; Phillips v. Commissioner, T.C. Memo. 1997-336;              

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