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"damages received (whether by suit or agreement and whether as
lump sums or as periodic payments) on account of personal in-
juries or sickness" under section 104(a)(2) and that therefore
that payment is to be excluded from his gross income for 1994.
In support of that position, petitioner contends that du Pont
agreed to pay the total settlement amount of $2,800,000 pursuant
to the stipulation of settlement of the lawsuit as damages for
the loss of the plaintiffs' business reputation and the loss of
their reputation as orchid growers, that such damages are per-
sonal injuries within the meaning of section 104(a)(2), and that
consequently the $1,623,203 settlement payment that he received
out of the $2,800,000 total settlement amount constitutes "the
amount of * * * damages received * * * on account of personal
injuries" that is to be excluded from his gross income under that
section. Respondent counters that the record does not support
petitioner's contentions. We agree with respondent.
In Commissioner v. Schleier, 515 U.S. 323, 336-337 (1995),
the Supreme Court of the United States summarized the require-
ments of section 104(a)(2) as follows:
In sum, the plain language of � 104(a)(2), the
text of the applicable regulation, and our decision in
Burke establish two independent requirements that a
taxpayer must meet before a recovery may be excluded
under � 104(a)(2). First, the taxpayer must demon-
strate that the underlying cause of action giving rise
to the recovery is "based upon tort or tort type
rights"; and second, the taxpayer must show that the
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