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the litigation. Robinson v. Commissioner, supra at 127. If a
settlement is attributable to claims based on tort or tort type
rights as well as other rights, it may be necessary to determine
which portion of the settlement is attributable to damages
received based on tort or tort type rights. Similarly, it may be
necessary to determine which portion, if any, of the settlement
may be attributable to damages received for personal physical
injuries or physical sickness.
In the instant case, we address first the question of
whether the $7,650 settlement payment was received on account of
a personal physical injury or physical sickness, if any. That is
because a resolution of this question in respondent’s favor
controls the disposition of the issue before us.
Petitioners would have this Court conclude that Heartland
paid the $7,650 settlement payment to Mrs. Prasil because she
suffered a “physical sickness”; i.e., she got very ill and her
Sweet’s syndrome worsened as a result of “the abuse that she took
from this man [Mr. Lakner] down at work” such that she had to be
hospitalized and could not walk. However, Mrs. Prasil admitted
that she suffered from a preexisting medical condition prior to
employment with Heartland, and there is no comparative evidence
of the nature of her condition before, during, or after
employment with Heartland to determine the nature of Mrs.
Prasil’s sickness, let alone the cause of her sickness. In fact,
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