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Commissioner’s determination of a deficiency is ordinarily
presumed correct, and the taxpayer has the burden of proving it
is erroneous or arbitrary), affg. T.C. Memo. 1993-17. As we
discussed in our original opinion and as further discussed below,
petitioners have failed to show that the subject jury awards were
received on account of personal injuries such as distress,
humiliation, mental anguish, or any other type of personal
injury. Indeed, the record does not establish that petitioner
suffered personal injuries. To the contrary, as discussed in our
original opinion and below, the evidence strongly indicates that
the injuries redressed by the jury awards in question were
economic injuries.2
Petitioner’s Compensatory Damages for Fraudulent Inducement
On supplemental brief, petitioners argue, in conclusory
fashion and without any references to the pages of the
transcript, the exhibits, or other sources relied upon to support
2 As we discussed in our original opinion, in construing
sec. 104(a)(2), the Supreme Court and other courts have
distinguished personal injuries and economic injuries. In Fabry
v. Commissioner, 223 F.3d 1261, 1270 (11th Cir. 2000), revg. 111
T.C. 305 (1998), the Court of Appeals appeared to recognize this
distinction, stating that in a nonphysical personal injury case,
the taxpayer must establish a direct causal link between the
damages received and “an intangible element of the injury (i.e.,
emotional distress, pain and suffering, loss of reputation,
etc.).” Similarly, the Court of Appeals distinguished between
compensation paid to replace the lost value of the Fabrys’
business and amounts paid to compensate them for “distress,
humiliation and mental anguish suffered by the Fabrys through the
loss of their good name”. Id.
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