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that “emotional distress shall not be treated as a physical
injury or physical sickness.” Only reimbursements for actual
medical care for such injuries are now excludable. The
legislative history of this amendment clarifies that “the term
emotional distress includes symptoms (e.g., insomnia, headaches,
stomach disorders) which may result from such emotional
distress.” H. Conf. Rept. 104-737, at 301 n.56 (1996), 1996-3
C.B. 741, 1041 n.56. Section 1605(d) of the SBJPA, 110 Stat.
1839, provides that (with an inapplicable exception) “the
amendments made by this section shall apply to amounts received
after the date of the enactment of this Act, in taxable years
ending after such date.” The SBJPA was enacted on August 20,
1996. Id. at 1755.
Petitioners contend that the “clear language” of section
1605(d) of the SBJPA dictates that the SBJPA amendments to
section 104(a)(2) are not effective until 1997 because 1997 is
“the tax year ending after the effective date of the enactment of
the SBJPA”. Petitioners argue that, if Congress had intended for
the amendments to become effective in the middle of a year, then
it could have unambiguously stated so. Petitioners misinterpret
this statutory language.
Petitioners’ 1996 taxable year ended December 31, 1996,
which is after the date of the enactment of the SBJPA.
Petitioner received the settlement proceeds on December 17, 1996,
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