Joyce M. and Thomas J. Hamm - Page 13

                                       - 13 -                                         
               Furthermore, the method used by IBM in calculating the ITO             
          payment supports our conclusion.  The ITO payment was calculated            
          as follows:                                                                 
               Employees who are approved for and comply with the                     
               terms of the ITO II program will receive the greater of                
               eight weeks pay or one week's pay for each six months                  
               of service fully or partially completed, up to a                       
               maximum of 52 weeks' pay. * * * The payment will be                    
               made in a lump sum and be based on the employee's                      
               regular salary and years of service as of the day he or                
               she leaves active employment. * * * This payment is in                 
               lieu of any other form of separation pay or exit                       
               incentive program to which the employee is, may or                     
               might have become entitled.  It is IBM's intent to pay                 
               only one incentive/separation type payment to an                       
               employee. * * *                                                        
          Indeed, in making the ITO payment, which was to be "in lieu of              
          any other form of separation pay or exit incentive program",                
          IBM's intent appears to be to "pay only one incentive/separation            
          type payment to an employee".  (Emphasis added.)  Accordingly,              
          based on our review of the facts and circumstances in the instant           
          record, we conclude that the ITO payment was paid by IBM to                 
          petitioner as severance pay, not to release a tort or tort type             
               As respondent has made a prima facie case that the                     
          requirements of the section 104(a)(2) exclusion are not met,                
          petitioners cannot rest upon mere allegations or denials but must           
          set forth specific facts showing that there is a genuine issue              
          for trial.  Celotex Corp. v. Catrett, 477 U.S. at 322; O'Neal v.            
          Commissioner, 102 T.C. at 674.  Petitioners contend that they are           
          entitled to exclude the ITO payment from gross income pursuant to           

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  Next

Last modified: May 25, 2011