The EEOC found that an employee of the U.S. Postal Service was sexually harassed by a coworker and that the USPS failed to take appropriate corrective action. The EEOC awarded her $33,695 in damages for the sexual harassment. The Tax Court yesterday held that the damages were not excludible from the employee’s income because they were not received "on account of personal physical injury or physical sickness" within the meaning of § 104(a)(2). Sanford v. Commissioner, T.C. Memo. 2008-158 (6/23/08).
