Kevin Wade Hamblin - Page 13




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          the other provisions of the agreement that quite clearly indicate           
          and establish that the settlement was intended to satisfy the               
          claims made in the class action.  Such language relied on by                
          petitioner in the Settlement Agreement, therefore, can be                   
          ignored.  See Peaco v. Commissioner, T.C. Memo. 2000-122.  An               
          express allocation, such as petitioner relies on, may be                    
          disregarded if the facts and circumstances surrounding a payment,           
          such as exists in this case, indicate that the payment was                  
          intended by the parties to be for a different purpose.  See                 
          Bagley v. Commissioner, supra; Robinson v. Commissioner, supra;             
          Threlkeld v. Commissioner, 87 T.C. 1294, 1307 (1986), affd. 848             
          F.2d 81 (6th Cir. 1988); Burditt v. Commissioner, T.C. Memo.                
          1999-117.  The Court, therefore, finds that the amounts awarded             
          to petitioner were for back pay and liquidated damages under the            
          Fair Labor Standards Act pursuant to the class action initiated             
          by the former employees of PayLess.  As such, the amount paid to            
          petitioner constituted gross income, and such amount is not                 
          excludable under section 104(a)(2).  See Commissioner v.                    
          Schleier, supra.  Respondent, therefore, is sustained.                      
               Reviewed and adopted as the report of the Small Tax Case               
          Division.  In order to present petitioner's claim to relief from            











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