- 11 - (say, at age 25) are assumed to suffer less damage than older workers, who have greater difficulty finding comparable jobs. The distribution formula therefore reflects pension eligibility, as well as age and seniority. Thereafter, in December 1993, the District Court ordered the disposition of the settlement proceeds to individual class members pursuant to the independent trustee's allocations (except for some minor changes not relevant here). In the same order, the District Court noted: Finally, the Court has received some correspondence from class members expressing concern regarding the taxability of their settlement awards. One particular class member * * * suggests that twenty percent (20%) of the payment amount be withheld for the purpose of satisfying federal income taxes. At this time the Court makes clear that there will be no withholding of funds from the settlement award to class members for tax purposes. This was not a lawsuit about lost wages. Therefore, each member shall be responsible for taxes based on their particular situation. [Emphasis added.] Petitioner received his portion of the recovery from the class action, $12,057.45, in December 1993. On his 1993 return, petitioner did not include this amount in gross income, claiming exemption under section 104(a)(2). In April 1994, respondent informally notified class members, such as petitioner, that the settlement proceeds were not excludable from gross income under section 104(a)(2). In March 1995, pursuant to a request by the Plaintiffs, the District Court issued another order. In that order, the District Court found that the class action: (1) Involved tort-like claims arising from allegations of wrongful conduct and was not aboutPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011