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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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