-14-
2. Analysis
Because the settlement payment was made pursuant to the
agreement between petitioner and the bank, we look first to the
agreement’s terms in order to determine whether the payment is
attributable to a personal physical injury. The agreement
provided that the settlement amount is payable to petitioner in
consideration of the settlement of petitioner’s “civil rights
claims” in case No. CV-N-94-455. The agreement also required
petitioner to release or request dismissal of all of his known
and unknown claims against the defendants arising out of both his
employment relationship with the bank and his State and Federal
court claims and litigation as additional consideration for the
settlement. The agreement, however, did not allocate any part of
the settlement amount to a personal physical injury or refer to a
personal physical injury resulting from any civil rights
violations or generally released claims. Rather, the agreement
expressly provided that the settlement amount was to be reported
to the IRS on a Form 1099 and was potentially taxable.
Because we cannot clearly discern from the agreement why the
settlement amount was paid, we must also look to the allegations
in petitioner’s complaint to determine whether the “civil rights
claims” to which the proceeds are allocated are claims for
personal physical injuries. See Robinson v. Commissioner, supra
at 127 (when payments are received pursuant to a settlement
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