- 9 -
litigation. Knuckles v. Commissioner, 349 F.2d 610, 613 (10th
Cir. 1965), affg. T.C. Memo. 1964-33; Robinson v. Commissioner,
supra at 127.
We therefore look to the settlement agreement to examine the
nature of the claim. The settlement agreement does not allocate
any part of the settlement payment to a personal physical injury
or physical sickness. Indeed, there is no reference to a
physical injury or physical sickness resulting from Liberty’s
actions, nor does the settlement agreement specifically carve out
any portion of the settlement payment as a settlement on account
of personal physical injury or physical sickness.
Reviewing the settlement agreement to ascertain Liberty’s
intent in making the settlement payment also does not support
petitioner’s argument. Under the settlement agreement,
petitioner generally released Liberty from any “claims in any way
related to Plaintiff’s employment with and termination from
Liberty Travel” in exchange for the total $70,000 Liberty agreed
to pay petitioner to settle the lawsuit. The settlement
agreement also states that Liberty and petitioner were entering
into the agreement as the result of a compromise and that the
agreement was being made solely to avoid the costs of litigation.
Liberty further expressly denied any wrongdoing against
petitioner.
We conclude that no portion of the $58,000 amount was
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011