T.C. Memo. 2000-98 UNITED STATES TAX COURT MARSHA M. BLAND, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 24846-97. Filed March 22, 2000. In connection with a corporate reorganization and consequent termination of her employment, P participated in an enhanced severance program offered to eligible employees. Under this program, P received a lump-sum payment, calculated based upon rate of pay and years of service, in return for signing a general release of all claims against her employer. An identical payment formula was applied and release document signed in the case of each participating employee. P excluded this payment from income, and R determined a deficiency for taxes attributable thereto. P contends that the payment was received in settlement of and to compensate for emotional distress she suffered as a result of sexual harassment in the workplace and, therefore, is excluded from income pursuant to sec. 104(a)(2), I.R.C. Held: The payment received by P is not excludable from income under sec. 104(a)(2), I.R.C., as damages received on account of personal injuries or sickness.Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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