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My former employer has agreed to settle a discrimination/whistleblower lawsuit I filed as a universal settlement out of court. This is after I filed a complaint with the EEOC n which they offered granted me a right to sue letter and after going to mediation it was found I signed an arbitration agreement. Now before arbitration begins they want to settle. If I owe taxes will it be taken directly out of the settlement since it is a discrimination suit? Will my attorney file a 1099 based on the settlement amount and then I pay the IRS?