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taxpayer signed a general release of “all claims” and received a
payment based on years of service and rate of pay. IBM reported
the payment as Form W-2 income, but the taxpayer argued that the
sum should be excluded from income under section 104(a)(2). See
id. He contended that he had a bona fide claim for intentional
infliction of emotional distress caused by his travel schedule
and pressures at work. See id. He emphasized that prior to
executing the release he had both filed internal grievances
regarding his complaints and been hospitalized for a nervous
breakdown. See id. He then asserted that, in light of these
previous grievances, IBM accepted his participation in the
severance program in lieu of litigating his claims. See id.
We assumed in Brennan v. Commissioner, supra, that the
taxpayer had established an underlying tort type cause of action
but found the following facts to indicate that the lump-sum
payment was more akin to severance pay than to personal injury
compensation: The terms of the release covered both contract and
tort liability; the release form was a standard document used by
IBM for all employees who participated in the program; and the
amount of the payment was calculated on the number of years of
service and the taxpayer’s salary. Lastly, the Court noted that
because the taxpayer had not come forward with any evidence of a
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