The recipient of the money should review the facts and options with an attorney. The tax treatment of the money generally depends on what the money is paid for.
In general, money received because of personal injury is not taxable. I do not want to appear gross or insensitive, but rape likely is treated as a personal injury.
Does the settlement agreement specify what the payment is for?
I am not a tax lawyer, but a very broad general statement would be that damages awarded for loss of earnings are considered as income, and therefore taxable. Other damages would generally not be taxable.
You definitely need to consult with an expert in the area of tax law!
