ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, December 14, 1996 TAG: 9612160051
SECTION: BUSINESS PAGE: A-10 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
Expanding an unusual federal tax case, more than 2,000 ex-employees of IBM are preparing to sue the Internal Revenue Service to try to win back $46 million in taxes they paid on severance benefits.
Echoing a suit filed in March on behalf of 750 ex-IBM workers, the group contends the severance they received amounted to a settlement of personal-injury claims because they had to sign a document releasing IBM from liability when they left.
Under IRS rules, settlement of personal-injury claims are exempt from federal income taxes.
The new plaintiffs plan to file a lawsuit Monday in the U.S. Court of Federal Claims in Washington, said James McDermott, a co-lead attorney in the case.
In the 53-page complaint, lawyers assert that IBM's firing program ``subjected IBM employees to considerable pain and suffering.'' The suit says the workers experienced ``a variety of emotional and physical symptoms, including insomnia and other sleep disorders, weight gain, headaches, hypertension, heart trouble and other trauma.''
The plaintiffs allege their stress hurt their families - driving up alcoholism and causing marital problems, including sexual dysfunction.
The IRS declined through a spokesman to comment, saying it does not discuss pending litigation and had not seen the lawsuit.
The former workers are among tens of thousands on the International Business Machines Corp. staff who lost their jobs in the early 1990s as the world's largest computer company cut costs and tried to revive slumping profits.
While millions of workers lost their jobs in recent waves of corporate work-force reductions, none have organized a tax fight in such an organized fashion as the former IBM workers.
Only ex-IBMers who made disputed tax payments within the past three years are eligible to join the lawsuits, because of a federal statute of limitations, McDermott said. Those who lost their jobs in 1993 - and paid taxes on severance the next year - must join the suit by April 15.
People who left IBM in 1992 or earlier are no longer eligible.
The lawsuit more than triples to nearly 3,000 the total number of laid-off IBM workers suing the IRS this year in separate cases.
LENGTH: Short : 50 linesby CNB