United States v. Burke, 504 U.S. 229, 6 (1992)

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234

UNITED STATES v. BURKE

Opinion of the Court

provides in relevant part that "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 . . . ." 4

Neither the text nor the legislative history of 104(a)(2) offers any explanation of the term "personal injuries." 5 Since 1960, however, IRS regulations formally have linked identification of a personal injury for purposes of 104(a)(2) to traditional tort principles: "The term 'damages received (whether by suit or agreement)' means an amount received . . . through prosecution of a legal suit or action based upon tort or tort type rights, or through a settlement agreement entered into in lieu of such prosecution." 26 CFR 1.104- 1(c) (1991). See Threlkeld v. Commissioner, 87 T. C. 1294, 1305 (1986) ("The essential element of an exclusion under section 104(a)(2) is that the income involved must derive from some sort of tort claim against the payor. . . . As a result, common law tort law concepts are helpful in deciding whether a taxpayer is being compensated for a 'personal injury' ") (internal quotation marks omitted), aff'd, 848 F. 2d 81 (CA6 1988).

A "tort" has been defined broadly as a "civil wrong, other than breach of contract, for which the court will provide a remedy in the form of an action for damages." See W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on the Law of Torts 2 (1984). Remedial principles thus figure prominently in the definition and conceptualization of torts.

4 Section 104, entitled "Compensation for injuries or sickness," provides similar exclusions from gross income for amounts received for personal injuries or sickness under worker's compensation programs ( 104(a)(1)), accident or health insurance ( 104(a)(3)), and certain federal pension programs ( 104(a)(4)).

5 See, e. g., H. R. Rep. No. 1337, 83d Cong., 2d Sess., 15 (1954); S. Rep. No. 1622, 83d Cong., 2d Sess., 15-16 (1954).

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