Marsha M. Bland - Page 19




                                               - 19 -                                                  
                  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.                                                                       











Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011