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incomplete as to the claims that were the basis for that portion
of the Settlement Agreement.
Subsequently, the small tax case designation was removed and
the case was processed according to the regular procedures of
this Court. Petitioners are now before the Court with respect to
taxable years 1991 through 1995. We decline to accept
petitioners' request that we revisit the issue in taxable year
1991 which was resolved in Green v. Commissioner, T.C. Summary
Opinion 1995-167.
Rule 39 requires a party to plead matters constituting an
affirmative defense such as collateral estoppel. Respondent
failed to so plead so we address for each of the years 1992
through 1995 the issue of whether the $18,120 attributable to the
Jury Award is excludable from income under section 104(a)(2).
Section 61 broadly defines gross income as all income from
whatever source derived. Any exclusion of items from income must
be narrowly construed. Commissioner v. Schleier, 515 U.S. 323,
328 (1995). Section 104(a)(2) provides that gross income does
not include "the amount of any damages received (whether by suit
or by agreement * * * ) on account of personal injuries or
sickness". Section 1.104-1(c), Income Tax Regs., provides that
the term "damages received" "means an amount received (other than
workmen's compensation) through prosecution of a legal suit or
action based upon tort or tort type rights, or through a
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