Stephen G. and Karen P. Shaltz - Page 10

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          Thus, insofar as petitioners’ sexual harassment complaint was for           
          personal physical injury or physical sickness, the record before            
          us would not support a finding that any amount of the $30,000               
          settlement was received on account of such injury or sickness.              
          As a result, the entire payment, with the exception of the amount           
          conceded by respondent, is taxable.  Bland v. Commissioner, T.C.            
          Memo. 2000-98 (citing Pipitone v. United States, 180 F.3d 859,              
          865 (7th Cir. 1999)); see also Taggi v. United States, 35 F.3d              
          93, 96 (2d Cir. 1994); Sherman v. Commissioner, T.C. Memo.                  
          1999-202; Brennan v. Commissioner, T.C. Memo. 1997-317.                     
               Petitioners argue alternatively that the net settlement                
          payment is not taxable to them to the extent of the                         
          aforementioned court costs and claimed medical expenses by virtue           
          of Estate of Clarks v. United States, 202 F.3d 854 (6th Cir.                
          2000).  We disagree.  We note at the outset that petitioners have           
          not established that they paid the claimed medical expenses for             
          emotional distress.  In Estate of Clarks, the Court of Appeals              


               6(...continued)                                                        
          silent as to any reason or reasons for petitioner’s disability.             
          Petitioners also provided a statement of petitioner’s physician             
          opining that petitioner as of Feb. 5, 1998, suffered from                   
          depression, anxiety, stress, and recurrent past stressors, and              
          had so suffered from these conditions from March 1995.  While the           
          statement also opined that depression and trauma at work were the           
          reasons for petitioner’s conditions, the statement does not                 
          mention anything about sexual harassment of petitioner.  On the             
          record before us, we are unable to link petitioner’s disability             
          and her conditions as reflected in the physician’s statement with           
          the sexual harassment complaint or, more importantly, to GM’s               
          settlement of that complaint.                                               




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