-8-
benefits and other economic advantages of employment) is not on
account of personal injuries or sickness. Commissioner v.
Schleier, supra at 331 (economic injuries are not personal
injuries for purposes of section 104(a)(2)); United States v.
Burke, supra at 239 (same); see also Robinson v. Commissioner,
supra at 126. Although each of the first three categories of
alleged damages (mental anguish, humiliation, embarrassment)
could be or have been construed to be personal injuries or
sickness, e.g., Commissioner v. Schleier, supra at 329; United
States v. Burke, supra at 235 n.6; see also Greer v. United
States, 207 F.3d 322, 328 (6th Cir. 2000), the question under the
applicable text of section 104(a)(2) is not merely whether those
damages reflected personal injuries or sickness but whether a
personal injury or sickness is physical in nature.4 Under the
facts herein, petitioners’ alleged mental anguish, humiliation,
and embarrassment are not personal physical injuries or physical
sickness within the meaning of section 104(a)(2) but are most
akin to emotional distress. Sec. 104(a)(2) and the flush
language of sec. 104(a); see H. Conf. Rept. 104-737, at 301 n.56
(1996), 1996-3 C.B. 741, 1041 n.56 (emotional distress, including
symptoms such as insomnia, headaches, and stomach disorders, is
4 Petitioners miss this point in that they erroneously apply
in their brief the pre-amendment text of sec. 104(a)(2) and the
Supreme Court’s discussion of that predecessor statute in
Commissioner v. Schleier, supra at 328-329.
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