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remaining issue is whether section 104(a)(2) allows petitioners
to exclude from their gross income $283,117 of settlement
proceeds received from State Farm Insurance Company (State Farm).
We hold it does not. Section references are to the Internal
Revenue Code in effect for the year in issue. Rule references
are to the Tax Court Rules of Practice and Procedure. Dollar
amounts are rounded.
Background
All facts have been stipulated and are so found. The
stipulated facts and the exhibits submitted therewith are
incorporated herein by this reference. Petitioners resided in
Thousand Oaks, California, when they petitioned the Court. They
are husband and wife, and they filed a 1992 Form 1040, U.S.
Individual Income Tax Return, using the filing status of "Married
filing joint return".
Ms. Westmiller was a claimant in the class action lawsuit
(the Lawsuit) entitled Kraszewski, et al. v. State Farm Gen. Ins.
Co.. The Lawsuit was filed against State Farm in the U.S.
District Court for the Northern District of California on June 1,
1979, on behalf of a class of women who alleged that State Farm
had engaged in sex discrimination during the recruitment, hiring,
and training of women for insurance sales agent positions within
California, in violation of title VII of the Civil Rights Act of
1964, Pub. L. 88-352, 78 Stat. 241, 253.
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