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After a concession by respondent,1 the issue for decision is
whether petitioner may exclude from income under section
104(a)(2) $25,000 that she received in 2002 in settlement of a
lawsuit. We hold that she may not.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
A. Petitioner
Petitioner lived in Florida when she filed the petition.
She was formerly employed in Indiana by Ivy Tech College (Ivy
Tech).
B. Petitioner’s Claims Against Ivy Tech
In 2001, petitioner filed employment discrimination charges
with the Equal Employment Opportunity Commission (EEOC) against
Ivy Tech and sued Ivy Tech in the U.S. District Court for the
Northern District of Indiana. Petitioner alleged in her lawsuit
that she had been damaged by unlawful acts or practices by Ivy
Tech arising from her employment with Ivy Tech and sought damages
and other relief.
C. Petitioner’s Illness and Injuries
In 2002, petitioner’s doctors diagnosed carpal tunnel
syndrome and ordered her not to use her right hand. Petitioner
1 Respondent conceded at trial that petitioner is not
liable for the accuracy-related penalty under sec. 6662(a).
Unless otherwise indicated, section references are to the
Internal Revenue Code as amended and in effect during 2002. Rule
references are to the Tax Court Rules of Practice and Procedure.
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Last modified: May 25, 2011