- 3 -
1985), affd. 912 F.2d 1182 (9th Cir. 1990). The District Court
found that women who attempted to become State Farm trainee
agents were "lied to, misinformed, and discouraged in their
efforts to attain the entry level sales position."
In 1992, State Farm issued Mrs. Reiher and her attorney a
check for $149,990 to release her claims against State Farm.
Mrs. Reiher's attorney received $37,841 of this amount, and she
received the rest. Mrs. Reiher did not report any of the
$149,990 amount on petitioners' 1992 tax return.
On May 2, 1996, respondent issued petitioners a notice of
deficiency for 1992. The notice stated that the $149,990 amount
was taxable income to them. The notice also stated that
petitioners could deduct the $37,841 payment as a miscellaneous
itemized deduction subject to the 2-percent floor of section 67.
Discussion
The instant case requires the Court to revisit the
taxability of the proceeds received by a claimant who was a
member of the class of plaintiffs in Kraszewski v. State Farm
Gen. Ins. Co. In each of our prior cases, we held that none of
the proceeds were excludable from the petitioning taxpayer's
gross income. See Easter v. Commissioner, T.C. Memo. 1998-8;
Brewer v. Commissioner, T.C. Memo. 1997-542; Gillette v.
Commissioner, T.C. Memo. 1997-301; Hayes v. Commissioner,
T.C. Memo. 1997-213; Hardin v. Commissioner, T.C. Memo. 1997-202;
Raney v. Commissioner, T.C. Memo. 1997-200; Clark v.
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