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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