-10-
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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