Taxing settlements

Taxing settlements

Victims receiving settlement checks from the Boston archdiocese are worried about taxes. Specifically, they are worried about whether some parts of their settlements (claims for physical injury) will be exempt from taxes and some (claims for emotional distress) won’t. While the lawyers hash out the problem with the IRS, some of the victims arep putting their checks into a trust that will pay out after Jan. 1 so the taxes won’t be due until April 2005.

Meanwhile, some of the victims are starting to gripe about the arbitrated amounts of their settlements, wondering why they didn’t get as much as the next guy.

Once again, I think these people are going to soon realize that getting these big checks is necessarily not going to make their lives magically better.