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NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
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SUPREME COURT OF THE UNITED STATES
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No. 94-500
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COMMISSIONER OF INTERNAL REVENUE, PETI-
TIONER v. ERICH E. SCHLEIER and HELEN B.
SCHLEIER
on writ of certiorari to the united states court
of appeals for the fifth circuit
[June 14, 1995]

  Justice Stevens delivered the opinion of the Court.
  The question presented is whether 104(a)(2) of the
Internal Revenue Code authorizes a taxpayer to exclude
from his gross income the amount received in settlement
of a claim for backpay and liquidated damages under the
Age Discrimination in Employment Act of 1967 (ADEA).

                      I
  Erich Schleier (respondent) is a former employee of
United Airlines, Inc. (United).  Pursuant to established
policy, United fired respondent when he reached the age
of 60.  Respondent then filed a complaint in Federal
District Court alleging that his termination violated the
ADEA.
  The ADEA -broadly prohibits arbitrary discrimination
in the workplace based on age.-  Lorillard v. Pollard,
434 U. S. 575, 577 (1978); Trans World Airlines, Inc. v.
Thurston, 469 U. S. 111, 120 (1985); see also McKennon
v. Nashville Banner Publishing Co., 513 U. S. __ (slip
op., at 4) (1995).  Subject to certain defenses, see 29
U. S. C. 623(f) (1988 ed. and Supp. V), 4 and 12 of
the ADEA make it unlawful for an employer, inter alia,
to discharge any individual between the ages of 40 and
70 -because of such individual's age.-  29 U. S. C.
623(a)(1) and 631(a).  The ADEA incorporates many of
the enforcement and remedial mechanisms of the Fair
Labor Standards Act (FLSA).  Like the FLSA, the ADEA
provides for -such legal or equitable relief as may be
appropriate to effectuate the purposes of this chapter.-
626(b).  That relief may include -without limitation
judgments compelling employment, reinstatement or
promotion.-  Ibid.  More importantly for respondent's
purposes, the ADEA incorporates FLSA provisions that
permit the recovery -of wages lost and an additional
equal amount as liquidated damages.-  216(b).  See
generally McKennon, 513 U. S., at __ (slip op., at 4-5).
  Despite these broad remedial mechanisms, there are
two important constraints on courts' remedial power
under the ADEA.  First, unlike the FLSA, the ADEA
specifically provides that -liquidated damages shall be
payable only in cases of willful violations of this chap-
ter.-  29 U. S. C. 626(b); see Trans World Airlines, Inc.
v. Thurston, 469 U. S., at 125.  Second, the Courts of
Appeals have unanimously held, and respondent does
not contest, that the ADEA does not permit a separate
recovery of compensatory damages for pain and suffering
or emotional distress.
  Respondent's ADEA complaint was consolidated with
a class action brought by other former United employees
challenging United's policy.  The ADEA claims were
tried before a jury, which determined that United had
committed a willful violation of the ADEA.  The District
Court entered judgment for the plaintiffs, but that
judgment was reversed on appeal.  See Monroe v. United
Air Lines, Inc., 736 F. 2d 394 (CA7 1984).  The parties
then entered into a settlement, pursuant to which
respondent received $145,629.  Half of respondent's
award was attributed to -backpay- and half to -liqui-
dated damages.-  United did not withhold any payroll or
income taxes from the portion of the settlement attribut-
ed to liquidated damages.
  When respondent filed his 1986 federal income tax
return, he included as gross income the backpay portion
of the settlement, but excluded the portion attributed to
liquidated damages.  The Commissioner issued a
deficiency notice, asserting that respondent should have
included the liquidated damages as gross income.
Respondent then initiated proceedings in the Tax Court,
claiming that he had properly excluded the liquidated
damages.  Respondent also sought a refund for the tax
he had paid on the backpay portion of the settlement.
The Tax Court agreed with respondent that the entire
settlement constituted -damages received . . . on account
of personal injuries or sickness- within the meaning of
104(a)(2) of the Code and was therefore excludable from
gross income.  Relying on a prior Circuit decision that
had in turn relied on our decision in United States v.
Burke, 504 U. S. 229 (1992), the Court of Appeals for
the Fifth Circuit affirmed.  Because the Courts of
Appeals have reached inconsistent conclusions as to the
taxability of ADEA recoveries in general and of the
United settlement in particular, compare Downey v.
Commissioner, 33 F. 3d 836 (CA7 1994) (United settle-
ment award is taxable) with Schmitz v. Commissioner,
34 F. 3d 790 (CA9 1994) (United settlement award is
excludable), we granted certiorari, 513 U. S. __ (1994).
Our consideration of the plain language of 104(a), the
text of the regulation implementing 104(a)(2), and our
reasoning in Burke convinces us that a recovery under
the ADEA is not excludable from gross income.

                     II
  Section 61(a) of the Internal Revenue Code provides a
broad definition of -gross income-: -Except as otherwise
provided in this subtitle, gross income means all income
from whatever source derived.-  26 U. S. C. 61(a).  We
have repeatedly emphasized the -sweeping scope- of this
section and its statutory predecessors.  Commissioner v.
Glenshaw Glass Co., 348 U. S. 426, 429 (1955).  See also
United States v. Burke, 504 U. S., at 233; Helvering v.
Clifford, 309 U. S. 331, 334 (1940).  We have also
emphasized the corollary to 61(a)'s broad construction,
namely the -default rule of statutory interpretation that
exclusions from income must be narrowly construed.-
United States v. Burke, 504 U. S., at 248 (Souter, J.,
concurring in judgment); see United States v. Centennial
Savings Bank FSB, 499 U. S. 573, 583-584 (1991);
Commissioner v. Jacobson, 336 U. S. 28, 49 (1949);
United States v. Burke, 504 U. S., at 244 (Scalia, J.,
concurring in judgment).
  Respondent recognizes 61(a)'s -sweeping- definition
and concedes that his settlement constitutes gross
income unless it is expressly excepted by another
provision in the Code.  Respondent claims, however, that
his settlement proceeds are excluded from 61(a)'s reach
by 26 U. S. C. 104(a).  Section 104(a) provides an
exclusion for five categories of -compensation for per-
sonal injuries or sickness.-  Respondent argues that his
settlement award falls within the second of those
categories, which excludes from gross income -the
amount of any damages received . . . on account of
personal injuries or sickness.-  104(a)(2).
  In our view, the plain language of the statute under-
mines respondent's contention.  Consideration of a
typical recovery in a personal injury case illustrates the
usual meaning of -on account of personal injuries.-
Assume that a taxpayer is in an automobile accident, is
injured, and as a result of that injury suffers (a) medical
expenses, (b) lost wages, and (c) pain, suffering, and
emotional distress that cannot be measured with
precision.  If the taxpayer settles a resulting lawsuit for
$30,000 (and if the taxpayer has not previously deducted
her medical expenses, see 104(a)), the entire $30,000
would be excludable under 104(a)(2).  The medical
expenses for injuries arising out of the accident clearly
constitute damages received -on account of personal
injuries.-  Similarly, the portion of the settlement
intended to compensate for pain and suffering consti-
tutes damages -on account of personal injury.-  Finally,
the recovery for lost wages is also excludable as being
-on account of personal injuries,- as long as the lost
wages resulted from time in which the taxpayer was out
of work as a result of her injuries.  See, e.g., Threlkeld
v. Commissioner, 87 T. C. 1294, 1300 (1986) (hypotheti-
cal surgeon who loses finger through tortious conduct
may exclude any recovery for lost wages because -[t]his
injury . . . will also undoubtedly cause special damages
including loss of future income-), aff'd, 848 F. 2d 81
(CA6 1988).  The critical point this hypothetical illus-
trates is that each element of the settlement is recover-
able not simply because the taxpayer received a tort
settlement, but rather because each element of the
settlement satisfies the requirement set forth in
104(a)(2) (and in all of the other subsections of 104(a))
that the damages were received -on account of personal
injuries or sickness.-
  In contrast, no part of respondent's ADEA settlement
is excludable under the plain language of 104(a)(2).
Respondent's recovery of back wages, though at first
glance comparable to our hypothetical accident victim's
recovery of lost wages, does not fall within 104(a)(2)'s
exclusion because it does not satisfy the critical require-
ment of being -on account of personal injury or sick-
ness.-  Whether one treats respondent's attaining the
age of 60 or his being laid off on account of his age as
the proximate cause of respondent's loss of income,
neither the birthday nor the discharge can fairly be
described as a -personal injury- or -sickness.-  Moreover,
though respondent's unlawful termination may have
caused some psychological or -personal- injury compara-
ble to the intangible pain and suffering caused by an
automobile accident, it is clear that no part of respond-
ent's recovery of back wages is attributable to that
injury.  Thus, in our automobile hypothetical, the
accident causes a personal injury which in turn causes
a loss of wages.  In age discrimination, the discrimina-
tion causes both personal injury and loss of wages, but
neither is linked to the other.  The amount of back
wages recovered is completely independent of the
existence or extent of any personal injury.  In short,
104(a)(2) does not permit the exclusion of respondent's
back wages because the recovery of back wages was not
-on account of- any personal injury and because no
personal injury affected the amount of back wages
recovered.
  Respondent suggests, nonetheless, that the liquidated
damages portion of his settlement fits comfortably within
the plain language of 104(a)(2)'s exclusion.  He cites
our observation in Overnight Motor Transportation Co.
v. Missel, 316 U. S. 572 (1942), that liquidated damages
under the FLSA -are compensation, not a penalty or
punishment,- and that such damages might compensate
for -damages too obscure and difficult of proof for
estimate.-  Id., at 584-585; see also Brooklyn Savings
Bank v. O'Neil, 324 U. S. 697, 707 (1945).  He argues
that Congress must be presumed to have known of our
interpretation of liquidated damages when it incorpo-
rated FLSA's liquidated damages provision into the
ADEA, and that Congress must therefore have intended
that liquidated damages under the ADEA serve, at least
in part, to compensate plaintiffs for personal injuries
that are difficult to quantify.
  We agree with respondent that if Congress had
intended the ADEA's liquidated damages to compensate
plaintiffs for personal injuries, those damages might well
come within 104(a)(2)'s exclusion.  There are, however,
two weaknesses in respondent's argument.  First, even
if we assume that Congress was aware of the Court's
observation in Overnight Motor that the liquidated
damages authorized by the FLSA might provide compen-
sation for some -obscure- injuries, it does not necessarily
follow that Congress would have understood that
observation as referring to injuries that were personal
rather than economic.  Second, and more importantly,
we have previously rejected respondent's argument: We
have already concluded that the liquidated damages
provisions of the ADEA were a significant departure
from those in the FLSA, see  Lorillard v. Pons, 434
U. S., at 581; Trans World Airlines, Inc. v. Thurston,
469 U. S., at 126, and we explicitly held in Thurston:
-Congress intended for liquidated damages to be punitive
in nature.-  Id., at 125.
  Our holding in Thurston disposes of respondent's
argument and requires the conclusion that liquidated
damages under the ADEA, like back wages under the
ADEA, are not received -on account of personal injury or
sickness.-

                     III
  Respondent seeks to circumvent the plain language of
104(a)(2) by relying on the Commissioner's regulation
interpreting that section.  Section 1.104-1(c) of the
Treasury Regulations, 26 CFR 1.104-1(c) (1994),
provides:
-Section 104(a)(2) [of the Internal Revenue Code]
excludes from gross income the amount of any
damages received (whether by suit or agreement) on
account of personal injuries or sickness.  The term
`damages received (whether by suit or agreement)'
means an amount received (other than workmen's
compensation) 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.-
Respondent contends that an action to recover damages
for a violation of the ADEA is -based upon tort or tort
type rights- as those terms are used in that regulation,
and that his settlement is thus excludable under the
plain language of the regulation.
  Even if we accept respondent's characterization of the
action, but see infra, at __, there is no basis for exclud-
ing the proceeds of his settlement from his gross income.
The regulatory requirement that the amount be received
in a tort type action is not a substitute for the statutory
requirement that the amount be received -on account of
personal injuries or sickness-; it is an additional require-
ment.  Indeed, the statutory requirement is repeated in
the regulation.  As the Commissioner argues in her
brief, an exclusion from gross income is authorized by
the regulation -only when it both (i) was received
through prosecution or settlement of an `action based
upon tort or tort type rights'. . . and (ii) was received
`on account of personal injuries or sickness.'-  Reply
Brief for Petitioner 2.  We need not decide whether the
Commissioner would have authority to dispense entirely
with the statutory requirement, because she disclaims
any intent to do so, and the text of the regulation does
not belie her disclaimer.  Thus, respondent's reliance on
the text of the regulation is unpersuasive.

                     IV
  Respondent also suggests that our decision in United
States v. Burke, 504 U. S. 229 (1992), compels the
conclusion that his settlement award is excludable.  In
Burke, we rejected the taxpayer's argument that the
payment received in settlement of her backpay claim
under the pre-1991 version of Title VII of the Civil
Rights Act of 1964 was excludable from her gross
income.  Our decision rested on the conclusion that such
a claim was not based upon -tort or tort type rights-
within the meaning of the regulation quoted above.  For
two independent reasons, we think Burke provides no
foundation for respondent's argument.
  First, respondent's ADEA recovery is not based upon
-tort or tort type rights- as that term was construed in
Burke.  In Burke, we examined the remedial scheme
established by the pre-1991 version of Title VII.  Noting
that -Title VII does not allow awards for compensatory
or punitive damages,- and that -instead, it limits
available remedies to backpay, injunctions, and other
equitable relief,- we concluded that Title VII was not
tort-like because it addressed -`legal injuries of an
economic character.'-  504 U. S., at 238, 239.
  Respondent points to two elements of the ADEA that
he argues distinguish it from the remedial scheme at
issue in Burke: First, the ADEA provides for jury trial,
see 29 U. S. C. 626(b); Lorillard v. Pons, 434 U. S., at
585; but cf. Lehman v. Nakshian, 453 U. S. 156 (1981);
and second, the ADEA allows for liquidated damages.
We do not believe that these features of the ADEA are
sufficient to bring it within Burke's conception of a -tort
type righ[t].-  It is true, as respondent notes, that we
emphasized in Burke the lack of a right to a jury trial
and the absence of any provision for punitive damages
as factors distinguishing the pre-1991 Title VII action
from traditional tort litigation, id., at 238-240.  We did
not, however, indicate that the presence of either or both
of those factors would be sufficient to bring a statutory
claim within the coverage of the regulation.
  In our view, respondent's argument gives insufficient
attention to what the Burke Court recognized as the
primary characteristic of an -action based upon . . . tort
type rights-: the availability of compensatory remedies.
Indeed, we noted that -one of the hallmarks of tradi-
tional tort liability is the availability of a broad range
of damages to compensate the plaintiff `fairly for injuries
caused by the violation of his legal rights.'-  Id., at 235.
We continued: -Although these damages often are
described in compensatory terms . . . , in many cases
they are larger than the amount necessary to reimburse
actual monetary loss sustained or even anticipated by
the plaintiff, and thus redress intangible elements of
injury that are deemed important, even though not
pecuniary in [their] immediate consequence[s].-  Ibid
(internal quotation marks omitted).  Against this
background, we found critical that the pre-1991 version
of Title VII provided no compensation -for any of the
other traditional harms associated with personal injury,
such as pain and suffering, emotional distress, harm to
reputation, or other consequential damages.-  Id., at 239.
  Like the pre-1991 version of Title VII, the ADEA
provides no compensation -for any of the other tradi-
tional harms associated with personal injury.-  Monetary
remedies under the ADEA are limited to back wages,
which are clearly of an -economic character,- and
liquidated damages, which we have already noted serve
no compensatory function.  Thus, though this is a closer
case than Burke, we conclude that a recovery under the
ADEA is not one that is -based upon tort or tort type
rights.-
  Second, and more importantly, the holding of Burke is
narrower than respondent suggests.  In Burke, following
the framework established in the IRS regulations, we
noted that 104(a)(2) requires a determination whether
the underlying action is -based upon tort or tort type
rights.-  United States v. Burke, 504 U. S., at 234.  In
so doing, however, we did not hold that the inquiry into
-tort or tort type rights- constituted the beginning and
end of the analysis.  In particular, though Burke relied
on Title VII's failure to qualify as an action based upon
tort type rights, we did not intend to eliminate the basic
requirement found in both the statute and the regulation
that only amounts received -on account of personal
injuries or sickness- come within 104(a)(2)'s exclusion.
Thus, though satisfaction of Burke's -tort or tort type-
inquiry is a necessary condition for excludability under
104(a)(2), it is not a sufficient condition.
  In sum, the plain language of 104(a)(2), the text of
the applicable regulation, and our decision in Burke
establish two independent requirements that a taxpayer
must meet before a recovery may be excluded under
104(a)(2).  First, the taxpayer must demonstrate that
the underlying cause of action giving rise to the recovery
is -based upon tort or tort type rights-; and second, the
taxpayer must show that the damages were received -on
account of personal injuries or sickness.-  For the
reasons discussed above, we believe that respondent has
failed to satisfy either requirement, and thus no part of
his settlement is excludable under 104(a)(2).
  The judgment is reversed.
                            It is so ordered.

  Justice Scalia concurs in the judgment.