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preliminary observations. In 1993, when respondent notified
petitioner that her 1992 return had been selected for
examination, continuing through 1994, when respondent mailed
petitioner the no change letter, it was respondent’s stated
position that a payment in satisfaction of a sex discrimination
claim under Title VII of the Civil Rights Act of 1964, as amended
in 1991 to provide for compensatory and punitive damages and for
jury trials, was excluded from gross income as damages for “tort-
like personal injury” under section 104(a)(2). See Rev. Rul. 93-
88, 1993-2 C.B. 61; see also Priv. Ltr. Rul. 94-48-014 (Aug. 30,
1994). In taking this position, respondent relied on language in
United States v. Burke, 504 U.S. 229, 234-241 (1992), which held
that back-pay damages under the pre-1991 version of Title VII of
the Civil Rights Act of 1964 were taxable because that version of
the Act, which provided neither for damages other than backpay
nor for a jury trial, did not redress a tort-like injury.
Petitioner’s counsel’s legal memorandum of April 8, 1994,
argued that petitioner’s settlement proceeds from the State Farm
class action lawsuit remedied a tort-like injury and were
excluded from gross income under section 104(a)(2), pursuant to
Rev. Rul. 93-88 and Priv. Ltr. Rul. 94-48-014. In issuing the no
change letter, respondent apparently accepted petitioner’s
argument that petitioner’s claim in the State Farm class action
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