- 9 - purely voluntary and resulted directly from his own insubordination, and, had he complied with the company's cancellation of leave policy, he would have avoided a confrontation with his supervisor and ultimately the company. The lump-sum payment thus appears to be severance pay rather than a payment for personal injury, and severance pay, like the pay it replaces, is taxable as income. See Brennan v. Commissioner, T.C. Memo. 1997-317. Even if the Court were to conclude that IBM paid petitioner husband the $24,060.44 in settlement of a possible claim for wrongful termination from IBM, the amount of lost wages received in such a situation is generally not linked to any personal injury, and, thus, such an award would not qualify for the exclusion from gross income provided in section 104(a)(2). Commissioner v. Schleier, supra at 330. The Court recognizes that mental distress may suffice as a personal injury or sickness under the law applicable to the taxable year in issue, id. at 329 n.4; however, petitioners have failed to show that any inconvenience or stress experienced by petitioner husband as a result of his resignation from IBM constituted a personal injury or sickness. There is no evidence that petitioner husband's distress, if any, manifested itself as physical symptoms, required him to seek medical help, or incapacitated him in any manner.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
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