-6-
gross income are construed narrowly. Commissioner v. Schleier,
supra at 328; United States v. Burke, 504 U.S. 229, 248 (1992)
(Souter, J., concurring in judgment). Before its amendment on
August 20, 1996, by the Small Business Job Protection Act of 1996
(SBJPA), Pub. L. 104-188, sec. 1605, 110 Stat. 1838, section 104
read in pertinent part as follows (pre-SBJPA section 104):
SEC. 104. COMPENSATION FOR INJURIES OR SICKNESS.
(a) In General.--Except in the case of amounts
attributable to (and not in excess of) deductions
allowed under section 213 (relating to medical, etc.,
expenses) for any prior taxable year, gross income does
not include--
* * * * * * *
(2) the amount of any damages received
(whether by suit or agreement and whether as lump
sums or as periodic payments) on account of
personal injuries or sickness;
The reference to personal injuries in this former version of
the statute did not include purely economic injuries but did
embrace “nonphysical injuries to the individual, such as those
affecting emotions”. United States v. Burke, supra at 235 n.6,
239.
The SBJPA then amended section 104, as relevant here, to
provide (post-SBJPA section 104):
SEC. 104. COMPENSATION FOR INJURIES OR SICKNESS.
(a) In General.--Except in the case of amounts
attributable to (and not in excess of) deductions
allowed under section 213 (relating to medical, etc.,
expenses) for any prior taxable year, gross income does
not include--
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