	ROMINGER LEGAL
		Fifth Circuit Court of Appeals Opinions - 5th Circuit
					Need Legal Help?
					Need Legal Help?
LEGAL RESEARCH CENTER
LEGAL RESEARCH CENTER			LEGAL HEADLINES - CASE LAW - LEGAL FORMS	NOT FINDING WHAT YOU NEED? -CLICK HERE

This opinion or court case is from the Fifth Circuit Court or Appeals. Search our site for more cases - CLICK HERE

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 98-60263
(Summary Calendar)

HARRY NEAL BALL; HELEN PATRICIA BALL,
Petitioners-Appellants,
versus
COMMISSIONER OF INTERNAL REVENUE,
Respondent-Appellee.
- - - - - - - - - - - - - -
Appeal from the Decision of the
United States Tax Court
- - - - - - - - - - - - - -
December 31, 1998
Before JOLLY, SMITH, and WIENER, Circuit Judges.
WIENER, Circuit Judge.
Petitioners-Appellants Harry Neal Ball and Helen Patricia
Ball, husband and wife, appeal from the judgment of the United
States Tax Court ("Tax Court") holding that $8,705.59 ---- being one-
half of the lump sum separation and severance payment made to Mrs.
Ball by her former employer pursuant to a "Separation Agreement"
executed contemporaneously with the theretofore unannounced
termination of employment by her former employer ---- should have
been included in gross income for the year in which she received
the payment. Agreeing with the Tax Court, we affirm.
The Separation Agreement identified the single payment to Mrs.
Ball as comprising equal amounts for separation and for severance.
The return position taken by the Balls was that the half
attributable to separation, as distinguished from severance, was
excludable from gross income under Internal Revenue Code (I.R.C.)

§ 104(a)(2). They contend that the separation portion of the
payment was in settlement of tort-like claims that Mrs. Bell might
have against her employer, such as claims for personal injury or
sickness. The Tax Court ruled in favor of the Commission,
concluding that the entire severance and separation payment was
taxable compensation. The Tax Court grounded its holding in the
uncontested facts that (1) at the time Mrs. Ball was fired, was
handed the Separation Agreement and the Release Agreement, and
signed them, she had no claims of any nature, asserted or
unasserted, against her former employer ---- as the Balls have
stipulated ---- and (2) the "laundry list" of the types of federal,
state, and local claims that were being released by Mrs. Ball,
expressly including without limitation, Title VII, ADEA, EPA, ADA,
ERISA, and F&MLA, does not somehow convert the Release Agreement
into a settlement of one or more actual claims for personal injury
or sickness.
We have carefully reviewed the appellate briefs of the
parties, the entire record ---- including every word of the trial
transcript, the Balls' trial memorandum, and the Tax Court's
Memorandum Findings of Fact and Opinion ---- and are satisfied that
the judgment of the Tax Court must be affirmed for the reasons set
forth in its opinion. The applicable section of the I.R.C. clearly
requires the existence of a justiciable claim of the type
identified therein and an express settlement and disposition of
such an extant claim. The case law is substantial, clear, and
unanimous to the effect that releases of the broad, generic type
2

signed by Mrs. Ball in connection with the termination of her
employment ---- at a time when no claims exist, whether or not
previously asserted or articulated ---- do not fall within the ambit
of I.R.C. § 104(a)(2). Consequently, payments of the nature made
to Mrs. Ball by her former employer, whether labeled severance or
separation, are not excludable from gross income.
AFFIRMED.
3