- 15 -
from gross income under section 104(a)(2). The relevant inquiry
is whether the claim is based upon tort or tort type rights and
the damages received are on account of personal injuries or
sickness. See Commissioner v. Schleier, 515 U.S. at 337.
Furthermore, neither the Internal Revenue Service nor any other
agency of the United States consented to a settlement agreement
awarding Mr. Broedel “tax free” payments.
The amount paid to Mr. Broedel under the settlement
agreement was equal to one and one-half times his annual salary.
The evidence in the record indicates that SUNY’s intent in
settling with Mr. Broedel was to induce his retirement and effect
the withdrawal of any and all complaints against SUNY. As we
stated earlier, Mr. Broedel’s complaint filed with the NYSDHR
included various claims. Not all of these claims were based upon
tort or tort type rights. The settlement agreement did not
allocate the payments among his claims, and petitioners have
failed to establish what portion, if any, was paid on account of
personal injuries or sickness arising from tort or tort type
rights. Indeed, the fact that the amount of $58,372.50 was based
on the amount Mr. Broedel would have received had he continued
working another year and a half points in the direction of
payment for reasons other than personal injury or sickness. See,
e.g., Bland v. Commissioner, T.C. Memo. 2000-98; Morabito v.
Commissioner, supra; Sodoma v. Commissioner, supra; Webb v.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011