Tax Court Finds Portion of Settlement Excludable from Gross Income

In Domeny v. C.I.R., 2010 Tax Ct. Memo LEXIS 9 (Jan. 13, 2010), Senior Judge Gerber of the Tax Court found that the taxpayer who had received, in settlement of a hostile-environment case, compensation for a flare-up of Multiple Sclerosis symptoms allegedly caused by her work environment, was entitled to exclude those moneys from her gross income as compensation for “physical injuries or physical sickness”, pursuant to Section 104(a)(2) of the Internal Revenue Code. A copy of the opinion can be found here.