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interference with contracts, for personal injury including injury
to [petitioner’s] personal and professional reputation and
emotional distress, [and] humiliation and embarrassment”.
Petitioners argue that, because the termination agreement
specifically sets forth the claims that formed the basis for
settlement, we need not look to the intent of the payor.
Assuming, arguendo, that the claims stated in the
termination agreement accurately reflect the basis for
settlement, any amount received on such basis is nevertheless
includable in gross income because it was not received on account
of personal physical injury or physical sickness within the
meaning of section 104(a)(2). As explained above, Congress
explicitly excluded from the definition of physical injuries or
physical sickness emotional distress and related injuries. Sec.
104(a); see H. Conf. Rept. 104-737, at 301 n.56, supra, 1996-3
C.B. at 1041 n.56. Injury to reputation, humiliation, and
embarrassment are akin to emotional distress. See Shaltz v.
Commissioner, T.C. Memo. 2003-173. Moreover, tortious
interference with contracts is an economic injury, not a physical
injury, and so damages received on account thereof are not
excludable under section 104(a)(2). See Robinson v.
Commissioner, 102 T.C. 126.
Petitioners nevertheless argue that petitioner suffered a
physical injury. In support thereof, petitioners presented the
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