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v. Commissioner, 102 T.C. 116, 126 (1994), affd. in part, revd.
in part on another issue and remanded 70 F.3d 34 (5th Cir. 1995).
State law controls whether the nature of the claim is a tort or
tort type right; Federal law controls the Federal tax
consequences pertaining to such interests and rights. See
Helvering v. Stuart, 317 U.S. 154, 162 (1942); Threlkeld v.
Commissioner, 87 T.C. 1294, 1305-1306 (1986), affd. 848 F.2d 81
(6th Cir. 1988).
As reflected in the May 1994 Suelthaus letters, which are
cross-referenced in Schedule III of the settlement agreement,
which in turn is cross-referenced in section 11.03 of the
settlement agreement, Katherine and Damian asserted that their
professional relationships with Maritz Inc. were each terminated
with “intent to injure” and sought compensatory damages with
respect to a variety of claims. These letters assert, in
identical language, certain common claims on Katherine’s and
Damian’s behalf; namely, claims for compensatory damages for
“defamation, infliction of emotional distress, emotional pain,
suffering, inconvenience, mental anguish, loss of enjoyment of
life, and other applicable claims”. The May 17, 1994, Suelthaus
letter asserts on Katherine’s behalf an additional claim for
“wrongful termination of employment”. The May 18, 1994,
Suelthaus letter asserts on Damian’s behalf an additional claim
of “intentional interference with his employment relationship”.
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