Jul. 20, 2010
Don't Make Punitive Damages Worse!
Making punitive damages non-tax deductible for defendants would raise immediate revenue for Washington but its long-term implications should be analyzed very closely.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
Defendants and their lawyers don't usually consider tax issues when settling cases. Plaintiffs usually do. Why the difference? Plaintiffs have to worry whether their settlement is income and if so, what type. Plaintiffs may also have trouble deducting their attorney fees.
In contrast, one reason business defendants don't consider tax issues is that they know they will deduct all settlements, judgments, and legal fees as busines...
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