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section 104(a)(2). Respondent counters that petitioners are not
entitled to exclude the settlement payments from gross income
under section 104(a)(2) because neither Lindsey or Halliburton
intended to compensate petitioner for personal injuries.
Section 61(a) provides that gross income includes all income
from whatever source derived. While section 61(a) broadly
applies to any accession to wealth, statutory exclusions from
income are narrowly construed. See Commissioner v. Schleier, 515
U.S. 323, 327 (1995); United States v. Burke, 504 U.S. 229, 233
(1992); Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 431
(1955). One such statutory exclusion appears in section
104(a)(2), which excludes from gross income damages received on
account of personal injuries or sickness, whether by suit or
agreement. Damages received are excludable from gross income
under section 104(a)(2) if the underlying action was based on
tort or a tort type claim and the amounts received were paid on
account of, and to compensate for, personal injuries or sickness.
See Commissioner v. Schleier, supra at 336-337; sec. 1.104-1(c),
Income Tax Regs. The primary characteristic of a tort type claim
is the availability of compensatory remedies which are
traditionally evidenced by “a broad range of damages to
compensate the plaintiff ‘fairly for injuries caused by the
violation of his legal rights.’” Commissioner v. Schleier, supra
at 335 (quoting United States v. Burke, supra at 235). Amounts
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