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nonphysical. See Commissioner v. Schleier, 515 U.S. at 329 n.4.
Intangible harms include those affecting emotions, reputation, or
character. See, e.g., Bland v. Commissioner, T.C. Memo. 2000-98.
Because IIED is an emotional injury, petitioner’s claim is
personal in nature.
In addition to the nature of the injuries, entitlement to
section 104(a)(2) benefits depends on the purpose of the payment.
See Bagley v. Commissioner, 105 T.C. 396, 406 (1995), affd. 121
F.3d 393 (8th Cir. 1997). The critical question is: “in lieu of
what was the settlement amount paid”? Id. Determining the
purpose or intent of a payment is a factual inquiry that takes
into account the terms of the agreement and the setting in which
it was reached and carried out. See Stocks v. Commissioner, 98
T.C. at 11. “If the payor’s intent cannot be clearly discerned
from the settlement agreement, his or her intent must be
determined from all the facts and circumstances of the case in
issue there.” Robinson v. Commissioner, 102 T.C. 116, 127
(1994), affd. in part, revd. in part and remanded 70 F.3d 34 (5th
Cir. 1995). An employer-payor’s lack of knowledge about the
claimed personal injury is indicative that the payment was not
made on account of a personal injury. See, e.g., Keel v.
Commissioner, T.C. Memo. 1997-278.
After a careful review of the record, we hold that Winston
did not intend to make the $116,000 settlement payment to
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