You need to consult an accountant or tax lawyer about this question. Most attorneys who represent plaintiffs in employment-related cases do not have the training to advise you about tax matters. You should be aware, however, that any sizeable award can impact your income tax situation significantly. It is usually a good idea to consult with a tax advisor before making the decision to settle. Your attorney may be able to negotiate how the money is allocated and the timing of payments made - but it is ultimately your pocketbook the IRS will go after. See our site's page on taxation for further information.