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out of his employment or severance thereof. All such
claims are forever barred by this AGREEMENT regardless
of the forum in which such claim(s) might be brought.
* * *
The parties expressly acknowledge that this
AGREEMENT is intended to include all claims which
FOSTER does not know or expect to exist in his
favor at the time of execution of this AGREEMENT
which claims are hereby extinguished. * * *
Pursuant to the terms of the agreement, petitioner received
payments from ABMI totaling $20,000 during the taxable year 1989.
On or about January 15, 1990, ABMI issued to petitioner an
Internal Revenue Service (IRS) Form 1099-MISC, which reported
nonemployee compensation paid to him in the amount of $20,000 for
1989.
Petitioner reported the $20,000 settlement received as
"Gross receipts or sales" on Schedule C of his 1989 Federal
income tax return. He claimed as an offset against this amount a
deduction for "PERSONAL INJURY SETTLEM [sic]" in the amount of
$15,000. This deduction was claimed to reflect the judgment of
petitioner's accountant that $5,000 of the settlement was
attributable to lost wages, and that $15,000 was attributable to
tort like claims excludable under section 104(a)(2). Petitioner
now claims, however, that his method of reporting the settlement
was erroneous, and that the entire amount received should have
been excluded from income under section 104(a)(2).
Exclusion of Settlement Proceeds
Respondent determined in the notice of deficiency that no
part of the $20,000 settlement was excludable from petitioner's
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