-2-
physical injury or physical sickness, as required by
sec. 104(a)(2), I.R.C. Nor have petitioners
established that they received any portion of the net
settlement amount for expenses that they paid for
medical care attributable to emotional distress, so as
to exclude that portion under the flush language of
sec. 104(a), I.R.C.
Robert J. Zinkel, Jr., for petitioners.
John W. Stevens, for respondent.
MEMORANDUM OPINION
LARO, Judge: This case is before the Court for decision
without trial. See Rule 122. Respondent determined a deficiency
of $12,205 in petitioners’ 1999 Federal income tax and a related
accuracy-related penalty of $2,441 under section 6662(a).
Following concessions by respondent, we are left to decide
whether section 104(a)(2) allows petitioners to exclude from
their gross income a payment that Karen P. Shaltz (petitioner)
received from the settlement of a sexual harassment complaint.
We hold it does not. Unless otherwise noted, section references
are to the applicable versions of the Internal Revenue Code.
Rule references are to the Tax Court Rules of Practice and
Procedure.
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