1. The Small Business Job Protection Act of 1996 limited the exclusion for damages received to nonpunitive damages received on account of a personal physical injury or physical sickness. The law specifically disqualifies emotional distress as a physical injury or physical sickness. Accompanying each new tax law is a committee report that provides an explanation of the new law. Use the Internet to find the joint conference committee report that discusses this law change and determine what Congress includes in its definition of emotional distress.

2. In the U.S. tax system, employers can provide a wide array of nontaxable fringe bene- fits to employees. Excluding fringe benefits from taxation is one method of encourag- ing employers to provide such benefits to their employees. Australia takes a different approach to the tax treatment of fringe benefits. Go to the Australian government Web site (http://www.ato.gov.au) and locate the government publication that deals with fringe benefits. Explain the Australian tax treatment of fringe benefits. Choose two of the fringe benefits listed in the publication and compare their treatment with the U.S. tax system treatment.