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WC did not identify a portion of the payment as a settlement
of a claim on account of a personal injury. The payment herein
appears to be in the nature of taxable severance pay rather than a
payment for personal injury. We believe it is no coincidence that
the settlement payment to petitioner approximates the amount of
severance pay Mr. Creighton and petitioner had discussed as an
essential term in the long-promised employment contract. (The
settlement amount was slightly over four times petitioner's then-
current base salary.) Severance pay is taxable income. Brennan v.
Commissioner, T.C. Memo. 1997-317.
Undoubtedly, petitioner was affected by WC's actions; however,
he has made no showing of any specific tort or personal injury.
Although wrongful employment termination possibly may result in
personal injury, the amount of lost wages received in such cases is
generally not linked to that personal injury, and, thus, such an
award will not qualify for the exclusion from gross income provided
in section 104(a)(2). Commissioner v. Schleier, supra at 330. In
this case, there is no link to personal injury.
Petitioner contends that Banks v. United States, 81 F.3d 874
(9th Cir. 1996), is controlling. We disagree. In Banks, the
taxpayer was employed as a steel worker. He was punched by a fellow
employee who was a former boxer, rendering Mr. Banks unconscious and
requiring 32 stitches to repair a wound to his forehead. The
company attempted to discharge Mr. Banks and his fellow employee for
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