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such an approach would improperly expand the scope of section
104(a)(2) because language regarding emotional harm could easily
be included in every complaint as standard boilerplate. See
Kightlinger v. Commissioner, T.C. Memo. 1998-357. What is more,
the mere fact that a taxpayer suffers "personal" injury from a
defendant's conduct is insufficient to satisfy the "on account of
personal injury or sickness" test. Commissioner v. Schleier,
supra at 336. Only recovery that is "attributable to" such
personal injury is excludable from gross income.
Furthermore, the relief requested by petitioner in the
amended complaint included a claim for punitive damages. In the
seminal case of O’Gilvie v. United States, 519 U.S. 79 (1996), it
was settled that punitive damages generally are not intended to
compensate “on account of” personal injury or sickness. Rather,
punitive damages are intended solely to levy private fines to
punish reprehensible conduct and deter its future occurrence.
See O’Gilvie v. United States, supra at 83.
Thus, based on the amended complaint, we cannot find that
Liberty Life intended to pay petitioner on account of personal
injury to any discernible extent.
B. The Release
Where, as here, the settlement agreement does not expressly
state the purpose for which the payment was made, the most
important factor is the payor’s intent. See Knuckles v.
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