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United considered that the amount was paid as severance pay.
Petitioner's letter of resignation states that she resigned for
personal reasons that were not connected with her employment.
The only mention of petitioner's claims against United is in the
release which releases United from "any and all claims, actions,
causes of actions, damages, costs, expenses and compensation"
including claims under the Age Discrimination in Employment Act
of 1967 (ADEA), Pub. L. 90-202, 81 Stat. 602. Included in the
release are claims that do not fall within the ambit of section
104(a)(2). See, e.g., Commissioner v. Schleier, supra (ADEA);
Knuckles v. Commissioner, supra (compensation). Furthermore, Mr.
Clinton was unaware of any specific tort claims that may have
been raised against United. We recognize that any involuntary
employment termination may involve mental anguish that may be
classified as a tort damage. On the other hand, there is no
indication here that the $11,100 was paid to compensate
petitioner for that type of damage. Therefore, the $11,100
severance payment is not excludable from gross income under
section 104(a)(2).
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011