Wade H. Griffin, III - Page 15




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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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