- 12 -
in order to be excluded from gross income, any amounts received
must be on account of personal injuries that are physical or
sickness that is physical. Small Business Job Protection Act of
1996, Pub. L. 104-188, sec. 1605, 110 Stat. 1755, 1838-1839. The
1996 amendment does not otherwise change the requirements of
section 104(a)(2) or the analysis set forth in Commissioner v.
Schleier, supra; it merely imposes an additional requirement for
an amount to qualify for exclusion from gross income under that
section.
Each of the two independent requirements described in
Commissioner v. Schleier, supra, that a taxpayer must satisfy in
order to qualify an amount for exclusion from gross income under
section 104(a)(2) involves two inquiries that are similar. In
the instant case, the dual inquiries under the first requirement
are whether Ms. Nield’s underlying claims were based on tort or
tort type rights and, if they were, whether such claims gave rise
to the payment by Goer of the settlement amount at issue. The
dual inquiries under the second requirement are whether Ms.
Nield’s alleged injuries were personal and physical in nature
and, if so, whether the settlement amount at issue was received
on account of such personal physical injuries.
Respondent contends that the claims set forth in the com-
plaint that Ms. Nield filed in the United States District Court
were not based on tort or tort type rights and that Ms. Nield did
Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 NextLast modified: May 25, 2011