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evidence presented to this Court, that he experienced mental
anguish and psychological problems around the time of the
“demise” of HGTG, he has failed to show a direct link between his
mental anguish and the settlement recovery. Although there is a
tangential reference to “mental anguish” in the settlement
agreement as an example of potential claims “that might have been
brought”, there is no specific amount allocated to any of the 13
counts or any potential claims that petitioner might have had or
that he might have subsequently attempted to perfect. Under
these circumstances, petitioner has not shown that there was a
direct link between the harm and the recovery; i.e., petitioner
has not shown that the recovery was attributable to his personal
injuries.
In addition, if the settlement agreement lacks express
language stating what the settlement amount was paid to settle,
then the most important factor in determining any exclusion under
section 104(a)(2) is the intent of the payor as to the purpose in
making the payment. See Stocks v. Commissioner, 98 T.C. 1, 10
(1992); Knuckles v. Commissioner, 349 F.2d 610, 612 (10th Cir.
1965), affg. T.C. Memo. 1964-33; Metzger v. Commissioner, 88 T.C.
at 847-848. Here, the settlement agreement was global in nature
and was intended to settle the pending lawsuit and any other
claims that might have been brought. There is no specific
allocation to any particular claim. Mental anguish is only
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