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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.
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