Clarence D. Kightlinger - Page 27

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               We find, therefore, that in light of all the other facts and           
          circumstances, the March 1995 order does not establish that                 
          petitioner received his recovery on account of personal injury.             
          3.  Tort-type Claim                                                         
               Petitioner contends that under the law for the taxable year            
          in issue, if recovery is received on account of a tort-type                 
          claim, then there is no requirement that recovery be on account             
          of personal injury.  In this regard, petitioner relies on United            
          States v. Burke, 504 U.S. 229 (1992).  We disagree with                     
          petitioner's contention, which is squarely refuted by                       
          Commissioner v. Schleier, 515 U.S. 323 (1995).                              
               In Commissioner v. Schleier, supra, the Supreme Court held             
          that even if the underlying lawsuit is tort-type, the recovery              
          itself must be "on account of personal injury".  Id.  Further,              
          the Supreme Court noted that its holding in United States v.                
          Burke, supra, did not imply a contrary rule.  The following                 
          excerpt from Commissioner v. Schleier, supra at 334-336, clearly            
          establishes the law in this regard:                                         
                    [Appellee] also suggests that our decision in United              
               States  v. Burke, 504 U.S. 229 (1992), compels the                     
               conclusion that his settlement award is excludable.  In                
               Burke, we rejected the taxpayer's argument that the payment            
               received in settlement of her backpay claim under the pre-             
               1991 version of Title VII of the Civil Rights Act of 1964              
               was excludable from her gross income.  Our decision rested             
               on the conclusion that such a claim was not based upon "tort           
               or tort type rights" within the meaning of the regulation              
               quoted above [sec. 1.104-1(c), Income Tax Regs.].  For two             
               independent reasons, we think Burke provides no foundation             
               for [appellee's] argument.                                             

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