According to an article in Accounting Today, the IRS has released final regulations relating to the exclusion from gross income for amounts received on account of personal physical injuries or physical sickness. The final regulations in TD 9573 reflect amendments under the Small Business Job Protection Act of 1996 and affect taxpayers who have received damages on account of personal physical injuries or physical sickness and taxpayers paying these damages. The regulations take effect on January 23, 2012. They delete an earlier requirement that to qualify for exclusion from gross income, damages received from a legal suit, action, or settlement agreement must be based upon “tort or tort type rights.” The regulations provide, instead, that the Section 104(a)(2) exclusion may apply to damages recovered for a personal physical injury or physical sickness under a statute that does not provide for a broad range of remedies, and that the injury need not be defined as a tort.
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IRS Broadens the Type of Damages which are Excluded from Gross Income
On Behalf of [nap_names id="FIRM-NAME-1"] | Jan 24, 2012 | Firm Case News
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