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because they asserted tort claims and a colorable claim for
personal injuries, that is sufficient to sustain the exclusion of
the entire amount from gross income.
Respondent, on the other hand, contends that the payment
petitioner received pursuant to the Settlement Agreement was not
to settle a tort claim or to pay petitioner on account of
personal injuries. Rather, respondent contends that the payment
was to redress contract claims. Thus, respondent's position is
that such payment fails the two-prong test under Commissioner v.
Schleier, supra at 337, and therefore is not excludable from
gross income under section 104(a)(2).
After a review of the Settlement Agreement, and the facts
and circumstances surrounding it, we find that there is no basis
to conclude that WNIC agreed to pay petitioner $17,880 per year
for 20 years in order to settle a tort or tort type claim, or a
claim for personal injuries.
The Settlement Agreement sets forth six provisions. Under
the Settlement Agreement, WNIC was obligated to "make regular,
guaranteed monthly payments to Green in the amount of $3,000.00
per month for a period of Two Hundred Forty (240) months,
commencing October 1, 1987." There is no language in any part of
the Settlement Agreement that specifically designates any portion
of petitioner's annuity to be paid to settle a tort or tort type
claim. Thus, we look to the intent of the payor, WNIC.
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