Tonia V. Cates - Page 6




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          inquiry,2 and is generally made by reference to the settlement              
          agreement.  Robinson v. Commissioner, 102 T.C. 116, 126 (1994),             
          affd. in part and revd. in part 70 F.3d 34 (5th Cir. 1995).  An             
          important factor in determining the validity of the agreement is            
          the “intent of the payor” in making the payment.  Knuckles v.               
          Commissioner, 349 F.2d 610, 613 (10th Cir. 1965), affg. T.C.                
          Memo. 1964-33.                                                              
               In examining the nature of the claim, we find that                     
          petitioner filed a complaint under Title VII of the Civil Rights            
          Act of 1964, as amended, and the Civil Rights Act of 1991.  In              
          United States v. Burke, supra at 237, the Supreme Court held that           
          recoveries received for the settlement of claims based on Title             
          VII of the Civil Rights Act of 1964, Pub. L. 88-352, 78 Stat.               
          253, are not excludable from gross income under section                     
          104(a)(2).  The Supreme Court concluded that because the remedies           
          under the Act did not create remedies for personal injuries, the            
          causes of action involving the Act were not based on tort or tort           
          type rights.  Id. at 241.  In 1991, Congress amended the Civil              
          Rights Act of 1964, effective November 21, 1991, to permit                  
          recovery of compensatory and punitive damages for certain                   
          violations.  Civil Rights Act of 1991, Pub. L. 102-166, sec. 102,           
          105 Stat. 1072.                                                             



               2  Sec. 7491(a), concerning burden of proof, has no bearing            
          on the underlying substantive issue.                                        





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