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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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