                          T.C. Memo. 1998-75



                        UNITED STATES TAX COURT



        EDWARD W. AND VIRGINIA K. REIHER, Petitioners v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No.   16449-96.                Filed February 23, 1998.



     Virginia K. Reiher, pro se.

     Mark A. Weiner, and Steven M. Roth, for respondent.



                          MEMORANDUM OPINION


     LARO, Judge:     This case is before the Court fully

stipulated.   See Rule 122.   Edward W. and Virginia K. Reiher

petitioned the Court on July 30, 1996, to redetermine

respondent's determination of a $37,556 deficiency in their 1992

Federal income tax.    Following concessions by petitioners, the
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only remaining issue is whether section 104(a)(2) allows them to

exclude from their gross income $149,990 of settlement proceeds

received from State Farm Insurance Co. (State Farm).    We hold it

does not.   Section references are to the Internal Revenue Code in

effect for the year in issue.   Rule references are to the Tax

Court Rules of Practice and Procedure.

                            Background

     All the facts have been stipulated and are so found.    The

stipulated facts and the exhibits submitted therewith are

incorporated herein by this reference.    Petitioners resided in

Ventura, California, when they petitioned the Court.    They filed

a 1992 Form 1040, U.S. Individual Income Tax Return, using the

filing status of "Married filing joint return".

     Mrs. Reiher was a claimant in the class action lawsuit (the

Lawsuit) entitled Kraszewski, et al. v. State Farm Gen. Ins. Co.

The Lawsuit was filed against State Farm in the U.S. District

Court for the Northern District of California on June 1, 1979, on

behalf of a class of women who alleged that State Farm had

engaged in sex discrimination during the recruitment, hiring, and

training of women for insurance sales agent positions within

California, in violation of Title VII of the Civil Rights Act of

1964, Pub. L. 88-352, 78 Stat. 241.

     On April 29, 1985, the District Court ruled that State Farm

was liable for gender discrimination.    See Kraszewski v. State

Farm Gen. Ins. Co., 38 Fair Empl. Prac. Cas. (BNA) 197 (N.D. Cal.
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1985), affd. 912 F.2d 1182 (9th Cir. 1990).    The District Court

found that women who attempted to become State Farm trainee

agents were "lied to, misinformed, and discouraged in their

efforts to attain the entry level sales position."

     In 1992, State Farm issued Mrs. Reiher and her attorney a

check for $149,990 to release her claims against State Farm.

Mrs. Reiher's attorney received $37,841 of this amount, and she

received the rest.   Mrs. Reiher did not report any of the

$149,990 amount on petitioners' 1992 tax return.

     On May 2, 1996, respondent issued petitioners a notice of

deficiency for 1992.   The notice stated that the $149,990 amount

was taxable income to them.    The notice also stated that

petitioners could deduct the $37,841 payment as a miscellaneous

itemized deduction subject to the 2-percent floor of section 67.

                              Discussion

     The instant 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 petitioning taxpayer's

gross income.   See Easter v. Commissioner, T.C. Memo. 1998-8;

Brewer v. Commissioner, T.C. Memo. 1997-542; Gillette v.

Commissioner, T.C. Memo. 1997-301; 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.
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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.          We hold

similarly today.   Petitioner has presented no new arguments which

would change our view on the instant issue, and we continue to

adhere to our view as espoused in those memorandum opinions for

the reasons stated therein.

     To reflect the foregoing,

                                              Decision will be entered

                                         for respondent.
