Ferdinand A. & Marla Morabito, et al. - Page 6

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          discrimination claims, and "claims based on theories of contract            
          or tort."  The Release also provided that the benefits received             
          for signing "constitute consideration for this release, in that             
          there are benefits to which you would not have been entitled had            
          you not signed this release."  This language indicates that IBM             
          considered the payments to petitioners as compensation for                  
          release of all potential claims, including, but not limited to,             
          tort claims.  This is supported by IBM's inclusion of each award            
          in petitioners' W-2 forms.  There is nothing in the Release to              
          show that it was tailored to a specific incident or named                   
          individual.  The Release is so broad it covers any potential                
          existing claim; it is not designed to compensate for a specific             
          tort violation except incidentally.                                         
          2.  Damages received                                                        
               Petitioners must also demonstrate that "the damages were               
          received 'on account of personal injuries or sickness.'"                    
          Commissioner v. Schleier, supra at 337 (quoting sec. 104(a)(2)).            
          Where a settlement agreement contains a number of claims, does              
          not allocate the portion excludable under section 104(a)(2), and            
          there is no other evidence that a specific claim was meant to be            
          singled out, the court must consider the entire amount taxable.             
          Taggi v. United States, supra at 746;  Sodoma v. Commissioner,              
          T.C. Memo. 1996-275.  Cf. Stocks v. Commissioner, supra at 17.              
          In this case, there was no division of the award by the parties.            

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