- 7 - settlement represented damages to him for a racial discrimination claim he had against PayLess, and the Settlement Agreement was broad enough to include such claim. Petitioner contends that throughout the period he was employed by PayLess, from 1986 to 1993, he was subjected to racial discrimination, which he discussed with his superiors at PayLess. Petitioner alleges that, although no suit was filed by petitioner against PayLess (including one for racial discrimination), petitioner discussed the matter with the attorneys representing plaintiffs in the class action. However, no action was taken by these attorneys to assert a racial discrimination claim in the class action, and there is no evidence that the matter was ever taken up with the opposing attorneys who represented PayLess. Nevertheless, petitioner contends that the proceeds from the class settlement constituted damages for personal injuries; i.e., resulting from racial discrimination practices by PayLess, relying on Rev. Rul. 1993-88, 1993-2 C.B. 61;3 Metzger v. Commissioner, 88 T.C. 834 (1987), affd. 845 F.2d 1013 (3d Cir. 1988); Morabito v. 3 Rev. Rul. 93-88, 1993-2 C.B. 61, provides that compensatory damages, including back pay, received in satisfaction of a claim of racial discrimination under 42 U.S.C. sec. 1981 and Title VII of the Civil Rights Act of 1964 are excludable from gross income as damages for personal injury under sec. 104(a)(2). In Rev. Rul. 96-65, 1996-2 C.B. 6, Rev. Rul. 93- 88 was declared obsolete prospectively from June 14, 1995. Petitioner's payment was received by him prior to June 14, 1995.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011