- 9 -
title VII did not redress tort type personal injuries and,
consequently, that settlement proceeds based upon such a claim
were not excludable under section 104(a)(2). Id. at 241-242.
The Court explained that title VII plaintiffs were entitled only
to backpay properly due them, which, if paid in the ordinary
course, would have been fully taxable. Id. at 241.
Similarly, in the instant case, the entire award received by
petitioner in settlement of her title VII claim against State
Farm is includable in gross income. The Settlement Agreement and
General Release between petitioner and State Farm, dated January
30, 1992, expressly provided that:
The approximate full value of [petitioner's] * * *
claim under the Consent Decree damage formula as of
February 1, 1992, is $715,931.00, which represents back
pay as a State Farm agent accrued from the year of the
challenged appointment [of James M. Mitchell] to
February 1, 1992, plus six months of front pay from
that date forward.
Under the terms of the settlement agreement, petitioner was paid
an amount equal to approximately 37 percent of the full claim
under the Consent Decree, plus an "incentive cash" payment.
Thus, no portion of petitioner's settlement award from State Farm
was attributable to the prosecution of tort or tort type rights.
Consequently, petitioner improperly excluded the settlement
7(...continued)
6-month award of front pay.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011