                        T.C. Memo. 1997-301



                      UNITED STATES TAX COURT



             FRED AND MARY GILLETTE, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 1423-96.                Filed June 30, 1997.



     Fred Gillette and Mary Gillette, pro sese.

     Mark A. Weiner, for respondent.



                        MEMORANDUM OPINION


     FOLEY, Judge:   By notice dated December 6, 1995, respondent

determined a deficiency in petitioners' 1992 Federal income tax

of $40,513 and an accuracy-related penalty of $8,103.    After

concessions, the issue we must decide is whether petitioners,
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pursuant to section 104(a)(2), are entitled to exclude amounts

received in settlement of a class action suit.    We hold they are

not.

       Unless otherwise indicated, all section references are to

the Internal Revenue Code as in effect for the year in issue, and

all Rule references are to the Tax Court Rules of Practice and

Procedure.

                             Background

       The facts have been fully stipulated under Rule 122 and are

so found.    At the time the petition was filed, petitioners

resided in Bakersfield, California.

       On June 1, 1979, a class action suit against State Farm

General Insurance Co., State Farm Mutual Automobile Insurance

Co., State Farm Life Insurance Co., and State Farm Fire and

Casualty Co. (State Farm) was filed in the U.S. District Court

for the Northern District of California, Kraszewski v. State Farm

Gen. Ins. Co.    The plaintiffs alleged that State Farm, in

violation of title VII of the Civil Rights Act of 1964 (Title

VII), had discriminated against women in the hiring of its

insurance agents.    On November 6, 1981, the District Court

bifurcated the litigation into a liability and a remedy phase.

       On April 29, 1985, the District Court ruled in the liability

phase that State Farm was liable under Title VII for classwide

discrimination on the basis of sex.     Specifically, it ruled that

women who attempted to become trainee agents were "lied to,
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misinformed, and discouraged in their efforts to obtain the entry

level sales position."    The court found State Farm liable with

respect to "all female applicants and deterred applicants who, at

any time since July 5, 1974, have been, are, or will be denied

recruitment, selection and/or hire as trainee agents by defendant

companies within the State of California."

     Mary Gillette was a member of the class action suit and

prevailed in her claim.    As a result, in 1992 State Farm issued

petitioner and her attorney a $155,888 check.    Petitioner's

attorney retained legal fees of $31,226, and the balance was paid

to petitioner.   None of the $155,888 amount was reported or

disclosed on petitioners' return.    Respondent determined that the

entire $155,888 should have been included in petitioners' gross

income.

                             Discussion

     This case requires the Court to revisit the taxability of

the proceeds received by a claimant who was a member of the class

of plaintiffs in Kraszewski v. State Farm Gen. Ins. Co.    In each

of our prior cases, we held that none of the proceeds were

excludable from the taxpayer's gross income.    See Hayes v.

Commissioner, T.C. Memo. 1997-213; Hardin v. Commissioner, T.C.

Memo. 1997-202; Raney v. Commissioner, T.C. Memo. 1997-200; Clark

v. Commissioner, T.C. Memo. 1997-156; Berst v. Commissioner, T.C.

Memo. 1997-137; Martinez v. Commissioner, T.C. Memo. 1997-126;

Fredrickson v. Commissioner, T.C. Memo. 1997-125.    Petitioner has
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presented no new facts or contentions.    Accordingly, we sustain

respondent's determination that the $155,888 is not excludable

under section 104(a)(2).

     We have considered all other arguments made by the parties

and found them to be either irrelevant or without merit.

     To reflect the foregoing,


                                           Decision will be entered

                                      under Rule 155.
