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in part, revd. in part and remanded 70 F.3d 34 (5th Cir. 1995).
The critical question is "in lieu of what was the settlement
amount paid?" Bagley v. Commissioner, 105 T.C. 396, 406 (1995).
Determination of the nature of the claim is a factual inquiry.
Robinson v. Commissioner, supra at 127.
The amounts petitioner received under the settlement
agreement were intended to settle petitioner's claim under Title
VII. As a result, the U.S. Supreme Court's decision in United
States v. Burke, supra, controls. In Burke, the Court considered
whether amounts received in settlement of a claim under Title VII
were excludable under section 104(a)(2). The Court analyzed
Title VII and concluded that it did not provide for remedies to
recompense claimants for tort type personal injuries. Instead,
the Court noted that the statute offered only injunctions, back
and front pay, and other equitable relief. Id. at 238-239. As a
result, the Court concluded that Title VII did not redress a tort
type personal injury and consequently that settlement proceeds
based on such a claim are not excludable under section 104(a)(2).
Petitioner contends that Burke is distinguishable.
Petitioner notes that the taxpayers in Burke were employed by the
defendant at the time of the discrimination and that the award
was essentially for a breach of contract. Petitioner contends
that it was the contractlike violation that led the Court to the
conclusion that the Title VII damages were not excludable. As a
result, petitioner contends that, consistent with Burke, an award
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