Articles Posted in Damages and taxes

August 25, 2006

Murphy v. IRS decision – Damages and taxation – Comments

Here is a pdf of the Murphy v. IRS case Murphy v. IRS — F.3d — 2006 WL 24113372, D.C. Cir., Aug. 22, 2006 (Slip opinion No. 05-5139).

There has been an AP wire article on this that was carried in the New York TImes see New York Times . Tax Code on Emotional Damages Tossed. August 22, 2006.

Also there wasn at least one commentary in the financial wires on this topic on August 23, see financial blog reaction to Murphy.

August 24, 2006

Murphy v. IRS: IRC 104(a)(2) nonphysical damages are excludable (Overturned but interesting reasoning)

by Paul J. Lesti, CSSC, RSP, MSSC

Murphy v. I.R.S. — F.3d — 2006 WL 24113372, D.C.Cir., Aug 22, 2006 (Slip Opinion No. 05-5139).

Quick summary

What the Murphy court said is if you are emotionally harmed or if your reputation is injured, you get to keep all of the damages and not pay any taxes.

Paul J. Lesti

Paul J. Lesti, CSSC, RSP, MSSC is the President and CEO of Lesti Structured Settlements, Inc. He has served as an expert witness in Structured Settlements, Economics, and Periodic Payment of Judgments. He is the author of Structured Settlements 2d, published by West - Thomson Reuters. Paul is a member of the National Structured Settlement Trade Association and the Society of Settlement Planners. He is a founding board member of the SSP. He holds a degree in Economics from the University of California, Berkeley, the NSSTA certification as a Certified Structured Settlement Consultant, CSSC, developed in conjunction with the executive program at the University of Notre Dame, the designation of a Registered Settlement Planner, RSP, through Texas Tech University, and Master Structured Settlement Consultant, MSSC, by NSSTA in cooperation with The University of Notre Dame, 2015.