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1993

Tax Law

Akron Tax Journal

Personal injury exclusion

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The Excludability Of Damages For Personal Injury After The Supreme Court's Decision In Burke, Ray A. Knight, Lee G. Knight, Wayne Nix Jan 1993

The Excludability Of Damages For Personal Injury After The Supreme Court's Decision In Burke, Ray A. Knight, Lee G. Knight, Wayne Nix

Akron Tax Journal

The scope of the personal injury exclusion under Internal Revenue Code § 104(a)(2) has been significantly broadened since the mid-1980's as the result of numerous court decisions in the areas of reputation and discrimination injuries. In our increasingly litigious society, more tax cases contesting the excludability of damages recoveries are expected. In United States v. Burke, decided May 26, 1992, the Supreme Court resolved an important issue regarding excludability from federal taxation of damages received in discrimination cases. Unfortunately, the case was decided on narrow grounds, which may only add to, rather than reduce, the conflict among the lower …