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Gretchen Carlson and Fox News settle for $20 million

Many Georgia residents have likely heard about the sexual harassment lawsuit that was filed against former Fox News Chairman and CEO Roger Ailes. Gretchen Carlson, a former Fox News anchor, brought sexual harassment allegations against Ailes that quickly became very public. After Carlson's lawsuit was filed, six other women told their stories about Ailes to New York magazine, and Ailes stepped down from his position at Fox News.

Carlson's sexual harassment lawsuit did not end up going to court as a settlement was reached on Sept. 6. According to reports, Fox agreed to settle the lawsuit for $20 million. The law firm that is representing Ailes confirmed that Ailes is not contributing any money to the settlement.

Most employers settle a case early in an effort to avoid negative media attention, and it is unusual for the size of a settlement to be made public like it was in the Fox News case. While the public does not always have to know how big of a settlement an individual received, the Internal Revenue Service does. Income that is derived from a court judgment or an out-of-court settlement must be reported on the recipient's annual income tax form.

A person who has recently been awarded money in a settlement or a judgment may want to talk to a tax attorney about how to report the money to the IRS. Though money that is awarded in a settlement may be taxed the same way that money from a judgment is taxed, settlement proceeds may be allocated in a way that is more tax-efficient.

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