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injury”, as required by section 105(c)(2), but instead are
computed with reference to the recipient’s earnings.
Accordingly, the exception does not apply to petitioner,6 and the
payments are taxable to him under section 105(a).
Finally, we note that even if petitioners were correct that
the lump-sum amount was not paid under the disability plan, they
would still be required to include it in income. At most,
petitioners’ argument that the lump-sum payment was not made
under the disability plan amounts to arguing that section 105(a)
does not apply. But if section 105(a) does not apply, then the
exclusion under section 105(c) does not apply, and the payments
are included in income under section 61, unless specifically
excluded by another section. There are no specific exclusions
available to petitioner. For example, respondent notes, and we
agree, that section 104(a)(2) does not apply. Section 104(a)(2)
excludes from income “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”. Section
104(a)(2) applies if the underlying cause of action is based upon
tort or tort type rights and the damages were received on account
of personal injuries or sickness. Commissioner v. Schleier, 515
U.S. 323, 337 (1995). In the instant case, there is no evidence
that petitioner had any tort or tort type claim against UNUM.
6 Because the payments are computed with reference to
earnings, we need not consider whether they are computed without
regard to the period of absence from work.
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