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section 104(a) to support their position that both the $10,000
payment and the $23,255 payment (collectively, settlement amounts
in dispute) are to be excluded from their income for 1994.
According to petitioners, those amounts were paid to Mr. D’Amico
to settle his claims against the Company for his physical inju-
ries.
Section 61(a) provides the following sweeping definition of
the term “gross income”: “Except as otherwise provided in this
subtitle, gross income means all income from whatever source
derived”. Not only is section 61(a) broad in its scope, see
Commissioner v. Schleier, 515 U.S. 323, 328 (1995), exclusions
from gross income must be narrowly construed, see id.; United
States v. Burke, 504 U.S. 229, 248 (1992).
Section 104(a)(2) on which petitioners rely provides that
gross income does not include “the amount of any damages received
(whether by suit or agreement and whether as lump sums or as
periodic payments) on account of personal injuries or sickness”.
4(...continued)
market value of the leased automobile is $12,000. We reject
petitioners’ alternative contention. First, that contention was
raised for the first time on brief, and respondent did not have
the opportunity to introduce evidence with respect to it.
Second, there is nothing in the record to support petitioners’
position on brief that the fair market value of the leased
automobile is $12,000. Third, on the record before us, we find
that it is the cost to the Company of purchasing the leased
automobile which is the benefit that Mr. D’Amico received under
the settlement agreement and which we hold below is to be
included in petitioners’ taxable income for 1994.
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