- 4 - tort or tort type rights, and (2) on account of personal injuries or sickness. See Commissioner v. Schleier, 515 U.S. 323 (1995). Petitioners contend that the express terms of the settlement agreement satisfy the personal injury or sickness requirement. The terms of the settlement agreement, however, do not reflect the realities of the settlement. See Robinson v. Commissioner, 102 T.C. 116 (1994) (stating, under similar circumstances, that the Court’s holding need not be consistent with the terms of a settlement agreement when those terms do not reflect the realities of the settlement), affd. in part, revd. in part, and remanded on other grounds 70 F.3d 34 (5th Cir. 1995). A significant portion of the proceeds was paid to satisfy the loss of compensation claim. The amount paid was consistent with CCIU’s attorney’s analysis of liability to Mrs. Peaco. The agreement between CCIU and Utica, offered by respondent, evidences CCIU’s intention to allocate a portion of the proceeds to personal injury. Petitioners, however, disavow reliance on that agreement and contend that it had no binding effect on the settlement and should be wholly disregarded. In sum, petitioners have failed to establish that Mrs. Peaco received all, or any part, of the proceeds on account of personal injury or sickness. Accordingly, the proceeds are not excludable pursuant to section 104(a)(2).Page: Previous 1 2 3 4 5 Next
Last modified: May 25, 2011