More courts say back pay for bias can be excluded

Article Abstract:

The United States Court of Appeals for the Sixth Circuit has held that back pay rewarded victims of discrimination is excludable from gross income. The Sixth Circuit, in agreement with the Third and Tenth Circuits, has held that back pay rewarded as a result of a court challenge of discriminatory practices can be excluded from reportable income because it is income derived from a personal injury. The case the Sixth Circuit ruled concerned three women who filed a Title VII class action suit alleging sex discrimination in remuneration. The women were awarded $5 million in personal damages, which was split among 1,000 workers. The Sixth Court held that the injuries resulting from Title VII discrimination were tort-type injuries and, therefore, personal injuries.

Sex discrimination, Employment discrimination, United States. Court of Appeals for the 6th Circuit

---

Planning strategies that will keep personal injury damages excluded from income

Article Abstract:

Damages awarded for discrimination or defamation might be excludable from the income of the recipient if the money is for personal injury. The tax treatment of damages awarded in both court and out-of-court settlements is explored. Recent court rulings have demonstrated that questions need to be asked about the taxability of personal injury awards. The language of tax law and regulations appears to be clear as to the taxation of such damages, but many taxpayers are being hit hard by the IRS, which has said that certain compensatory damages are taxable as ordinary income. Several cases and letter rulings are described.

Personal injuries

---

Exclusions from income are narrower after the Tax Reform Act of 1986

Article Abstract:

The Tax Reform Act of 1986 has reduced the types of income that are excluded from income tax. Previously exempt forms of income that are now at least partially taxable include: employee awards, certain types of employee fringe benefits, interest from municipal bonds, proceeds from life insurance benefits, scholarships, and fellowships. The Tax Reform Act reduced the tax rate, but also broadened the income tax base.

Laws, regulations and rules, Income tax, Employee benefits

Similar abstracts:

• Abstracts: Purchase price allocations restricted by Tax Reform Act of 1986. How to make the most of the remaining deductions under the new law
• Abstracts: Purchase price allocations restricted by Tax Reform Act of 1986. part 2 Some accounting practices will have to be changed (again) as a result of RA '87
• Abstracts: Trade bills feature more bark than bite. Congress to head the vile raiders, insider traders off at the pass. Pre-shipment inspections pose rising threat to exports
• Abstracts: Congress grapples with a useful definition of insider trading
• Abstracts: Effects of alternative sample space representations on the accuracy of auditors' uncertainty judgments. A behavioral study of accounting variables in performance-incentive contracts

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.