The 2008 Update to Taxation of Damage Awards and Settlement Payments, 3rd Edition, brings readers up to date on judicial, Congressional and IRS developments in this ever-changing area. Highlights include:
• New Cases and Rulings - The latest cases, rulings, regulations, IRS notices and announcements, affecting the entire spectrum of tax issues in litigation.
• Murphy's Law - Remaining implications of the landmark Murphy v. IRS decision. First, the D.C. Circuit held it was unconstitutional to tax damages for "human capital." The same three judge panel reversed itself, and the taxpayer has requested Supreme Court review.
• Attorneys' Fees Deduction - Interpretation of the statutory above-the-line deduction for attorneys' fees.
• Stock Options and Stock Losses - New cases on the treatment of stock options, investment litigation and deferred compensation recoveries.
• Tax-Free Income - When legal fees relate to tax-exempt income.
• Wage Treatment - How to allocate between wage and non-wage recoveries for employment tax purposes.
• 1099s to Lawyers - The IRS's final regulations on Forms 1099 issued to attorneys under Section 6045(f), ending years of debate over the interplay of these regulations with the Middleman Regulations.
• Class Actions - How to treat legal fees in class actions.
• Reimbursed Legal Fees - Tax implications when legal fees are paid by third parties.
• Assignment of Claims on Death - New material addressing when a plaintiff dies prior to settlement or judgment.