OTHER NEWS - Nov. 27, 1991
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From Times Staff and Wire Reports
Back Pay to Discrimination Victims Ruled Taxable: People awarded back pay to settle discrimination claims must pay income taxes on the money, a federal appeals court ruled. The court rejected arguments by Cleveland B. Sparrow Sr. that the $92,300 settlement he received from the Navy was a non-taxable damage award to compensate for a personal injury--racial discrimination. Instead, the court said, “It represents back wages which, although belatedly received, are nevertheless income” and thus must be taxed.
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