Tip of the Week #7
Be careful demanding punitives as a matter of course in your personal injury cases; punitive damages are taxable whereas compensatories usually are not. If you settle a case in which you demanded punitives, the IRS will want to allocate some of that recovery to the punitives claim triggering tax liability for your client. If you really have a claim for punitives, you can assert the claim later in time for trial.
Posted on Fri, October 23, 2009
by Sharon Coleman