- 10 - wrongful termination, petitioners are not entitled to exclude from income any part of the proceeds received. Petitioners have not proven what portion, if any, of the $1,125,000 payment was received in settlement of tort or tortlike claims. The General Release does not make any allocation between tort (or tortlike) claims and other types of claims. The General Release identifies many potential claims which could be interpreted as sounding in contract or in tort. Thus, from the record before us it is impossible to differentiate the actual basis for settlement. And failure to show the specific amount of the payment allocable to the claims of tort or tortlike damages for personal injuries results in the entire amount's being presumed not to be excludable. See Taggi v. United States, 35 F.3d 93, 96 (2d Cir. 1994); Getty v. Commissioner, 91 T.C. 160, 175-176 (1988), affd. on this issue and revd. on other issues 913 F.2d 1486 (9th Cir. 1990). Petitioner asserts that the General Release settled his claim for damages for personal injuries. We do not agree. The General Release does not state that the amount petitioner received was paid to settle a potential personal injury claim against WC. And 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, 612-613 (10th Cir. 1965), affg. T.C. Memo. 1964-33.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011