- 9 -9
Commissioner, 99 F.3d at 26. Therefore, the Kovacs line of
authority controls.
Petitioners contend that the holdings of Kovacs and its
progeny are flawed and should not be followed. We are, however,
bound by this Court's prior decisions, unless subsequent events
warrant a change in position. See Vasquez v. Hillery, 474 U.S.
254, 266 (1986); Hesselink v. Commissioner, 97 T.C. 94, 99
(1991). After considering the relevant post-Kovacs authorities
including Commissioner v. Schleier, 515 U.S. 323 (1995) (holding
that damages received under the Age Discrimination in Employment
Act of 1967, Pub. L. 90-202, 81 Stat. 602, are not excludable
pursuant to section 104(a)(2)) and O'Gilvie v. United States, 519
U.S. __, 117 S. Ct. 452 (1996) (holding that punitive damages are
not excludable pursuant to section 104(a)(2)), we reject
petitioners' contention that departure from Kovacs and its
progeny is warranted. Accordingly, petitioners must include in
income the prejudgment interest portion of their respective
settlements.
3. Section 212 Deduction
Respondent determined that petitioners were entitled to an
itemized deduction for attorney's fees and costs relating to the
taxable portion (i.e., the portion relating to prejudgment
interest) of their respective settlements. Respondent's
determination is presumed correct, and petitioners have the
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