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(1995), affd. 121 F.3d 393 (8th Cir. 1997). Determining the
nature of the claim is a factual inquiry.3 Robinson v.
Commissioner, 102 T.C. 116, 126 (1994), affd. in part, revd. in
part, and remanded on another issue 70 F.3d 34 (5th Cir. 1995).
“[W]here an amount is paid in settlement of a case, the critical
question is, in lieu of what was the settlement amount paid”.
Bagley v. Commissioner, supra. An important factor in making
such determinations is the “intent of the payor” in making the
payment. Knuckles v. Commissioner, 349 F.2d 610, 613 (10th Cir.
1965), affg. T.C. Memo. 1964-33. If the payor’s intent cannot be
clearly discerned from the settlement agreement, the intent of
the payor must be determined from all the facts and circumstances
of the case, including the complaint filed and details
surrounding the litigation. Id.; Robinson v. Commissioner, supra
at 127.
Under the terms of the settlement agreement, petitioner
generally released the Meadowlands from “all actions or claims
* * * arising out of * * *[petitioner’s] employment with * *
*[the Meadowlands]” in exchange for the settlement proceeds and
his resignation as an employee of the Meadowlands. The
settlement agreement also states that the Meadowlands and
3 In their brief, petitioners take the position that sec.
7491(a) is applicable, and the burden of proof on this issue
rests with respondent. To the extent that it does, we find that
respondent has met that burden.
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