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v. Household Finance Corp., 885 F.2d 542, 544 (9th Cir. 1989),
citing Foley v. Interactive Data Corp., 765 P.2d 373 (1988).
Section 104(a)(2) excludes only damages received on account of
the prosecution or settlement of tort or tort type claims, not
the prosecution or settlement of economic rights arising out of
a contract. Commissioner v. Schleier, 515 U.S. ____, 115 S. Ct.
2159.
To the extent petitioner argues that the broad definition of
a "claim" in the agreement with ABMI covers potential claims for
personal injuries, thereby qualifying the settlement for
exclusion under section 104(a)(2), we are not persuaded. The
existence of an agreement that contains a release of undisclosed
or potential claims is not sufficient evidence, in and of itself,
that the amounts paid under that agreement are eligible for
section 104(a)(2) exclusion. Galligan v. Commissioner, supra.
Furthermore, even if we were to set aside the question of
the payor's intent, we find that, based on the record,
petitioner's claims of tortious injury from his firing were
motivated in this matter "not by actionable injury to petitioner,
but rather by the tax advantage resulting to him for settlement
on that ground." Knuckles v. Commissioner, T.C. Memo. 1964-33,
affd. 349 F.2d 610 (10th Cir. 1965).
(...continued)
authority over its employee does not include the right to demand
that the employee commit a criminal act to further its
interests). Petitioner has failed to demonstrate, however, that
it was ever the "intent of the payor" to settle such a claim.
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