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the Montana Human Rights Act and all claims for mental and/or
physical injury, damages to or loss of personal reputation,
libel, slander, or defamation of character, intentional
infliction of distress or violation of civil or constitutional
rights. It is accordingly difficult to differentiate the actual
basis for settlement. Similarly, we are unable to discern from
the method of payment whether any portion was designated or
intended to be allocable to any one of petitioner’s claims.
The settlement agreement between petitioner and the company
does not specifically indicate that the four monthly payments or
the lump-sum payment received by petitioner were paid to settle a
potential personal injury claim against the employer/company.
Where a settlement agreement lacks express language stating what
the settlement amount was paid to settle, then the most important
factor is the intent of the payor. Knuckles v. Commissioner, 349
F.2d 610, 612 (10th Cir. 1965), affg. T.C. Memo. 1964-33; Church
v. Commissioner, 80 T.C. 1104, 1107 (1983).
In that regard the evidence in this case does not present a
predicate for finding that petitioner’s former employer made an
identifiable portion of the payments to settle a claim in tort or
on account of a personal injury. The payments here appear to be
more in the nature of taxable severance pay rather than a payment
for personal injury. Petitioner was profoundly affected by the
actions of the company, but there has been no showing of any
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