Stephen G. and Karen P. Shaltz - Page 1

                                 T.C. Memo. 2003-173                                  

                               UNITED STATES TAX COURT                                

                    STEPHEN G. AND KAREN P. SHALTZ, Petitioners v.                    
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 6523-02.               Filed June 11, 2003.                 

                    Ps timely filed their joint 1999 Federal income                   
               tax return wherein they failed to report a $30,000                     
               payment P-W received from GM during 1999.  That payment                
               arose from a complaint that P-W had filed against GM                   
               and one of its employees for sexual harassment                         
               primarily in violation of the Elliott-Larsen Civil                     
               Rights Act, Mich. Comp. Law, secs. 37.2101-37.2804                     
               (2001).  In her complaint, P-W prayed solely for an                    
               award of “damages for mental anguish, humiliation,                     
               embarrassment, and loss of benefits and other economic                 
               advantages of employment.”  Following mediation, GM                    
               settled W’s complaint by paying to P-W $30,000,                        
               inclusive of costs, interest, and attorney fees.                       
               Held:  But for $9,691 conceded by R to be                              
               excludable in this case from gross income, Ps are not                  
               entitled to exclude any of the settlement payment from                 
               their gross income under sec. 104(a)(2), I.R.C.  Ps                    
               failed to establish that any of the net settlement                     
               payment was received by P-W on account of a personal                   

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