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explanation to be incredible. We do not believe that if Ms.
Nield had communicated to her attorney that she suffered personal
physical injuries related to her employment, her attorney would
have failed to allege any such injuries in the complaint, espe-
cially since Ms. Nield’s attorney filed the complaint on her
behalf in December 1996 after Congress amended section 104(a)(2)
to require that any amounts received after August 20, 1996, be
received on account of personal physical injuries or physical
sickness in order to be excludable from gross income. See Small
Business Job Protection Act of 1996, Pub. L. 104-188, sec. 1605,
110 Stat. 1755, 1838-1839.7
Another example of Ms. Nield’s testimony that we find to be
questionable is her testimony that her attorney advised her that
the tax law did not require her to include the settlement amount
at issue in gross income. That testimony is belied by the
settlement agreement which required Goer to issue Form 1099 to
7Nowhere in the complaint is there an allegation that Ms.
Nield suffered any personal physical injuries. In fact, the only
use of the word “physical” in the complaint is an allegation that
Goer caused Ms. Nield “severe and grievous mental and emotional
harm which in turn resulted in severe physical consequences”.
That claim in Ms. Nield’s complaint was a claim for damages on
account of “severe and grievous mental and emotional harm”. Sec.
104(a) provides that emotional distress is not to be treated as a
physical injury or physical sickness for purposes of sec.
104(a)(2). In this connection, the legislative history of the
1996 amendment states: “It is intended that the term emotional
distress includes symptoms (e.g., insomnia, headaches, stomach
disorders) which may result from such emotional distress.” H.
Conf. Rept. 104-737, at 301 n.56 (1996), 1996-3 C.B. 741, 1041
n.56.
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