- 22 -
parties. See Robinson v. Commissioner, supra at 129; cf. Fono v.
Commissioner, supra at 696 ("We are not convinced that a weighing
of the 'economic realities'--i.e., the merits of petitioners'
claims * * *--is the standard to be applied where a taxpayer
challenges the allocation in his own agreement.") (Emphasis
added.) To do so would effectively eviscerate the requirements
of section 104(a)(2), and would allow taxpayers to exclude
settlement proceeds from income at will in those instances where
the payor is unconcerned with how the allocation is made.
B. The Facts and Circumstances in the Instant Case Reveal
That the Settlement Was Not on Account of Personal Injury Claims.
Having decided to look behind the express allocation made in
the settlement agreement, we turn now to examine other factors,
including the payor's intent and the details surrounding the
litigation, to characterize the nature of the claim. Robinson v.
Commissioner, supra at 127; Threlkeld v. Commissioner, 87 T.C. at
1306.
Petitioners' attempt to characterize $800,000 of the $1
million payment as having been made on account of personal
injuries is belied by the record. See Glynn v. Commissioner, 76
T.C. at 120. Other than petitioner's self-serving testimony and
the conclusory testimony of his psychotherapist, which we do not
find persuasive, there is no evidence before the Court that the
defendants' actions caused petitioner to suffer emotional
distress. Petitioner was fired discreetly and suffered no undue
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