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petitioner was unable even to discuss the terms of the agreement
with Amdahl.
Petitioners further argue (1) that the amount paid to
petitioner for treatment of his injury was less than the normal
cost of such treatment, (2) that petitioner’s prior injury may
result in future costs if it is discovered that his injury was
more serious than previously thought, and (3) that petitioner has
not yet received any amounts for pain and suffering with respect
to the injury. All of these assertions are irrelevant to the
underlying intent in Amdahl’s making the one-time payment as part
of petitioner’s severance package.
Because petitioner received the one-time payment as part of
a severance package in connection with the termination of his
employment, and not on account of personal physical injury or
sickness, the payment is not excludable from gross income under
section 104(a)(2).
Petitioners make the alternative argument that the one-time
payment for the release is excludable as a workers’ compensation
payment. They are presumably arguing that section 104(a)(1) is
applicable in this case. Section 104(a)(1) generally excludes
from income “amounts received under workmen’s compensation acts
as compensation for personal injuries or sickness.” It is clear
that petitioner did not receive the one-time payment under a
workmen’s compensation act or “under a statute in the nature of a
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