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none of the amounts petitioner received were to compensate for
physical injuries or sickness.
The Court concludes, for the reasons explained below, that
section 104 as amended by the SBJPA is applicable to the instant
case. Further, petitioner is not entitled to the exclusion
afforded by section 104. The payment petitioner received
pursuant to the malicious prosecution lawsuit is therefore
subject to taxation under the default rule of section 61(a).
III. Analysis
A. Applicable Law
At the outset, we note that petitioner’s arguments regarding
retroactivity are premised on her contention that the relevant
conduct occurred in August of 1994 with the filing of the
malicious prosecution lawsuit. Respondent, in contrast, focuses
on 1998 when the judgment became final and petitioner received
the payment in question. For the sake of completeness and
because we conclude, under these facts, that application of the
amended section 104 would not run afoul of the standards
typically employed to evaluate retroactive legislation, we
discuss section 104 under those standards, including the test for
retroactivity advocated by petitioner.1
1 We note, however, that the amendment to sec. 104 is not in
fact a “retroactive” statute, in that the effective date
provision, quoted infra p. 12, was prospective only from the date
of enactment.
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