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Lawsuits, Awards, and Settlements Audit Techniques Guide

lawsuits , awards , and Settlements Audit Techniques Guide NOTE: This document is not an official pronouncement of the law or the position of the Service and cannot be used, cited, or relied upon as such. This Guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date. Audit Guide Rev. 5/2011 1 Contents Chapter 1 Introduction and Issues .. 2 Introduction .. 2 Issues .. 3 Chapter 2 Taxability of Lawsuit Payments .. 4 Terminology/Definitions.

fees and court costs since IRC § 265 expressly denies any deduction for expenses related to tax-exempt income. Determine if any of the lawsuit, award or settlement proceeds constituted punitive damages. All punitive damages are taxable whether received in relation to a physical or non-physical injury or sickness.

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  Audit, Expenses, Settlement, Awards, Lawsuits, And settlements audit

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