- 27 -
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.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 NextLast modified: May 25, 2011