- 8 - suffering, emotional distress, harm to reputation, or other consequential damages * * *. Id. at 239. Because the taxpayers’ remedies under title VII were limited to wages on which they otherwise would have been taxed, the Court held that title VII’s sole remedial focus was the award of back wages and did not redress a tortlike personal injury within the meaning of section 104(a)(2) and the applicable regulations. See id. at 241. As such, the settlements received by the taxpayers pursuant to their title VII claims were not excludable from gross income under section 104(a)(2). Similar to the taxpayers in United States v. Burke, supra, petitioner brought a claim under title VII against her employer. Since the damages available to petitioner as a title VII claimant consisted only of wages,3 which would otherwise be taxable, the $150,000 recovery received by petitioner as partial payment of her title VII judgment does not constitute “damages received * * * on account of personal injuries”. Thus, under the reasoning of 3 In 1991, the Civil Rights Act, Pub. L. 102-166, 105 Stat. 1071 (1991), expanded the damages available under title VII and created a right of recovery for compensatory and punitive damages for certain intentional violations of title VII. In Landgraf v. USI Film Prods., 511 U.S. 244 (1994), the Supreme Court held that the 1991 amendments to the Civil Rights Act did not apply retroactively. Because petitioner’s title VII suit was filed in 1990 and the conduct underlying the suit occurred from 1981 to 1984, the application of sec. 104(a)(2) to any amounts received from petitioner’s title VII claim must be considered in light of the Civil Rights Act as it existed prior to the 1991 amendments. See Clark v. Commissioner, T.C. Memo. 1997-156. In any event, there is no evidence that petitioner sought in her Complaint or was awarded damages on account of personal injury.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
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