Tax,
Alternative Dispute Resolution
Dec. 5, 2024
Exempting sexual abuse and assault recoveries from tax is overdue
The Survivor Justice Tax Prevention Act seeks to exempt settlements for sexual abuse and assault from taxes, addressing long-standing ambiguities in tax law.
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.
Should sexual assault and abuse settlements be taxed? Most
people would answer no, yet the tax law has long been unclear. Under the tax
code, compensatory damages for personal physical injuries or physical sickness
are tax-free, while damages for emotional injuries are taxable. Yet if you have
emotional injuries triggered by physical ones, the damages for
the emotional injuries are also tax-free.
If the causa...
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