Edward P. Knoll and Mary K. King-Knoll - Page 19

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          On the other hand, Winston would be paying approximately the same           
          amount that was originally offered to petitioner.                           
               These circumstances call into question whether petitioner’s            
          IIED claim or Winston’s agreement to characterize the settlement            
          as for personal injury was bona fide.  The terms of the                     
          settlement agreement were negotiated over a 2�-year period.                 
          Throughout that period, the total dollar amount being offered by            
          Winston remained at approximately $165,000.  It is significant              
          that the personal injury clauses were included in proposed drafts           
          of a settlement agreement substantially after negotiations began            
          and that the $165,000 offer was not materially increased after              
          the insertion of the personal injury claim or clause.  The                  
          payment offers in the March 23 and April 15, 1992, letters, and             
          the first four drafts of the settlement agreement characterized             
          the settlement as being entirely in exchange for petitioner’s               
          severance from Winston.  Up to that point, petitioner was                   
          unsuccessful in negotiating an increase in the amount of benefits           
          for the severance.  It was only after petitioner learned from               
          George Leonard that settlement proceeds from personal injury                
          claims could be excluded from taxable income that petitioner                
          proposed recharacterizing a part of the settlement payment as               
          being for personal injury.                                                  
               Most significantly, the settlement amount received by                  
          petitioner was not increased for personal injury claims over and            






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