- 13 - to consider in applying section 104(a)(2). Knuckles v. Commissioner, 349 F.2d 610, 612 (10th Cir. 1965), affg. T.C. Memo. 1964-33; Stocks v. Commissioner, 98 T.C. 1, 10 (1992). As indicated in our findings of fact, the credit union's board of directors had several motives for making the payments to petitioner. The documentary or testimonial evidence shows that such motives were to avoid (1) a suit for libel, defamation, or damage to petitioner's professional reputation; (2) a suit for age discrimination or wrongful discharge; (3) expenses of litigation; and (4) claims for breach of an implied employment contract. In addition, the board wanted to provide petitioner with retirement pay. Because the intent of the credit union in making payments to petitioner is derived from all of the above motives, we think an allocation of the payments is appropriate and necessary under these facts and circumstances. Stocks v. Commissioner, supra at 16-17. In view of the testimony of Hugo W. Wandt, Jr., and Richard H.E. Smith, who were members of the credit union's board of directors, and William French, an attorney who represented petitioner in negotiations with the board, we are persuaded that the claim for defamation and damage to professional reputation was the predominant reason motivating the credit union's payments to petitioner. Respondent did not attempt to rebut this testimony by calling witnesses, especially other members of thePage: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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