Court decides against IRS on taxing personal inj. comp.

[Shoonra]

The DC Circuit today decided against the IRS and held that a provision of the IRC permitting the taxation of personal injury compensation was unconstitutional. As the money had been intended to compensate the recipient, it did not have the effect of actually adding to his assets and therefore did not count as taxable income. The court emphasized that not every payment received by a taxpayer is taxable income.
http://pacer.cadc.uscourts.gov/docs/...8/05-5139a.pdf

[REDCLOUD]

Personal injusry awards are non taxable under 104-2. What is unique here is that the court held 104-2 to be unconstitutional in not allowing income from non physical injuries to be excluded.

[Libertarian]

Originally Posted by Shoonra

The DC Circuit today decided against the IRS and held that a provision of the IRC permitting the taxation of personal injury compensation was unconstitutional. As the money had been intended to compensate the recipient, it did not have the effect of actually adding to his assets and therefore did not count as taxable income. The court emphasized that not every payment received by a taxpayer is taxable income.
http://pacer.cadc.uscourts.gov/docs/...8/05-5139a.pdf

Interesting case, Shoonra. Thanks for posting it.

[freeindeed]

Originally Posted by Shoonra

The DC Circuit today decided against the IRS and held that a provision of the IRC permitting the taxation of personal injury compensation was unconstitutional. As the money had been intended to compensate the recipient, it did not have the effect of actually adding to his assets and therefore did not count as taxable income. The court emphasized that not every payment received by a taxpayer is taxable income.
http://pacer.cadc.uscourts.gov/docs/...8/05-5139a.pdf

Could this be more evidence change is in the works? Could it be as a result of the PRA? Just food for thought. Take alook at this article here. I like what this author implies about the ruling in the appelate court.