- 43 -
growers, that argument also was rejected, as a matter of law, by
the Supreme Court in O'Gilvie v. United States, 519 U.S. 79
(1996). In O'Gilvie, the Supreme Court held that the "on account
of" test of section 104(a)(2) requires more than a "but-for"
connection between the damages and a personal injury. That test,
according to the Supreme Court, requires that the damages be
awarded by reason of, or because of, the personal injury, and not
another cause. See O'Gilvie v. United States, supra. On the
record before us, we find that petitioner has failed to establish
that all or any portion of the $2,800,000 total settlement
amount, or the $1,623,203 settlement payment, was paid by reason
of, or because of, the loss of the plaintiffs' business rep-
utation or the loss of their reputation as orchid growers.
Although we need not do so in order to resolve the question
presented under section 104(a)(2), for the sake of completeness
we shall address petitioner's contention that "Damage to rep-
utation is clearly personal injury for the purpose of IRC
�104(a)(2)." While not altogether clear, petitioner appears to
be taking the position that damage to reputation is, as a matter
of law, personal injury within the meaning of section 104(a)(2).
We rejected such an argument in Fabry v. Commissioner, 111 T.C.
305 (1998), and we reject any such argument here.
In Fabry, the taxpayers (the Fabrys) operated a nursery in
which they grew ornamental plants, and they developed a rep-
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