- 6 -
The settlement agreement does not reference whether the
damage award was based on the Civil Rights Act of 1964 or 1991.
However, Rockford clearly intended to pay petitioner a settlement
in compensation of her emotional distress. The settlement
agreement clearly stated that the $35,000 was to compensate her
for “emotional injuries”.
Section 104(a) provides that “emotional distress shall not
be treated as a physical injury or sickness.” The Committee
Report provides “that the term emotional distress includes
physical symptoms (e.g., insomnia, headaches, stomach disorders)
which may result from such emotional distress.” H. Rept. 104-586
(1996), 1996-3 C.B. 331, 482 n.24. Thus, petitioner’s headaches,
insomnia, and stomach problems were intended by Congress to be
treated as emotional distress, and therefore the compensation for
those symptoms is not excluded from gross income under section
104(a)(2).
Moreover, assuming that hypertension is a physical injury (a
point that we specifically do not decide) we cannot find that
Rockford intended to compensate petitioner for her hypertension.
Petitioner’s medical records submitted to this Court establish
that petitioner was first diagnosed with borderline hypertension
in May of 1993. Petitioner was later hospitalized in June of
1993 for hypertension, weakness, and hyponatremia. Petitioner
alleged that she suffered racial discrimination in 1995, perhaps
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011