The statute you've cited actually speaks to the inadmissibility of settlement dialogue but remember, your written Release can inlcude a confidentiality provision which protects you for both disclosing the money to the IRS, as well as responding to a subpoena. By way of example only, your confidentiality provision might read as follows:
"The Releasing Parties agree that this Release and any and all matters concerning the resolution of the dispute between the parties, other than the fact that the dispute has been amicably resolved, will be regarded as confidential information between the parties, and except as required by legal process, tax reporting purposes, or to enforce the terms hereof; neither they, nor their counsel, will reveal, disseminate by publication of any sort or release in any manner or means this Release, or the contents of this document, to any other person or entity, including without limitation, to any member(s) of the public, newspaper, magazine, radio station, television station, website, and/or electronic media of any kind."
This way, you are protected in the event you are ever subpoenaed to testify and more importantly, you will avoid any reporting dilemma with the IRS.
The answer above is good. You can also add in the release that this is a compromise for a claim and not an admission of guilt.
This is not intended to create an attorney client relationship and is for educational purposes only. You should always contact an attorney and go over the issue at length with all the details.