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at least to the extent of $112,542.21 (the amount of the special
severance payment offered to petitioner).
The remaining portion of the payment, $2,957.79 (the
additional payment) is not separately dealt with in the final
agreement, and, therefore, we must look outside of the final
agreement to determine its character. Cf. Stocks v.
Commissioner, 98 T.C. 1, 10 (1992) (“If the settlement agreement
lacks express language stating what the settlement amount was
paid to settle, then the most important factor in determining any
exclusion under section 104(a)(2) is ‘the intent of the payor’ as
to the purpose in making the payment.”) (citing Knuckles v.
Commissioner, 349 F.2d 610, 613 (10th Cir. 1965), affg. T.C.
Memo. 1964-33); Metzger v. Commissioner, 88 T.C. 834, 847-848
(1987), affd. without published opinion 845 F.2d 1013 (3d Cir.
1988). Ms. Nikituk was respondent’s witness. Although she did
not directly participate in the negotiations with petitioner, she
testified that she understood the additional amount to be “a
severance amount to settle this case amicably”. Petitioner could
have called someone from Boehringer with direct knowledge of
those negotiations in an attempt to support petitioner’s position
that some portion of the additional amount (or, indeed, the
payment itself) was section 104(a)(2) damages, but he failed to
do so. We can infer from that failure that such testimony would
not have been favorable to petitioner. Mecom v. Commissioner,
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