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The agreement’s broad language indicates that IBM
considered the $207,000 payment as a quid pro quo for
petitioner’s release of all potential claims against
IBM, including, but not limited to, tort claims. IBM
did not make an identifiable portion of the payment in
settlement of petitioner’s personal injury claim. The
payment was for severance pay as well as for
petitioner’s release of potential tort and nontort
claims against IBM. [Id.]
As in Brennan v. Commissioner, supra, the Court held the entire
payment taxable because no basis for allocating some portion
solely to personal injury damages was proven by the taxpayer or
reflected by the record. See id.
Given these authorities and the evidence before us, we see
no grounds upon which to distinguish petitioner’s circumstances.
As explained above, we cannot accept petitioner’s argument that
the full amount of her payment was intended to compensate for
personal injuries, and we are satisfied that it is in the main
properly characterized as taxable severance pay. Therefore,
since the record is devoid of any information that would support
allocation of a specific sum to personal injury damages, the
entire payment is taxable. See Pipitone v. United States, 180
F.3d 859, 865 (7th Cir. 1999); Taggi v. United States, 35 F.3d
93, 96 (2d Cir. 1994); Sherman v. Commissioner, supra; Brennan v.
Commissioner, supra.
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