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tortious interference with business relationships were received
on account of personal injuries within the meaning of section
104(a)(2). Although the facts reflect that the defendants’
conduct may have damaged Mr. Anderson’s business reputation,
the vast majority of the recovery was for property damages
caused by interference with Mr. Anderson’s business
relationships. In Commissioner v. Schleier, 515 U.S. 323
(1995), the Supreme Court cautioned that there must be a direct
link between the cause of harm and its effect for the section
104(a)(2) exclusion to apply. Petitioners have failed to show
such a link between an injury to Mr. Anderson’s business
reputation caused by the defendants’ actions and the economic
loss for which Mr. Anderson recovered. Therefore, petitioners
have failed the second prong of the Schleier test with regard
to the damages received under Mr. Anderson’s claim for tortious
interference with business relationships. Accordingly we
sustain respondent’s determination on this issue.
We must now examine the second claim for which petitioners
received damages. In Mr. Anderson’s second claim, he alleged
that the defendants “intentionally, willfully, and maliciously”
acted to cause injury to petitioner’s ”peace, happiness, and
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