Personal Injury Money Damages are Not Taxable by the IRS – following a Settlement, Verdict, or Judgment in Washington

The tax man is coming! April 15th is fast approaching, meaning it is time to pay Uncle Sam his due. As a Kirkland Washington personal injury attorney I rarely wade into tax law issues. However, for all my Washington personal injury clients, there is one very important tax regulation that applies to personal injury lawsuit verdicts or settlement money.

 

If you are the injured victim or family member that recovers money as the result of a personal injury lawsuit or claim – then the money received is not taxed. Under Federal Treasury Regulation § 104(a)(2) Gross Income (potentially taxable income) does not include money (unless punitive damages – which aren’t available under Washington laws) received as the result of personal injury lawsuit /claim settlement, judgment, or verdict.

 

If you settled your car accident or other Washington injury accident case in the last tax year you will not have to pay taxes on it. You will probably have to report that you received a personal injury settlement or verdict, but no taxes will be charged against it. So when your accountant or tax software asks you about the amount received don’t worry, you won’t pay more taxes by telling the IRS about your injury settlement/verdict money. 

 

The tax code section reads specifically: “Section 104(a)(2) excludes from gross income the amount of any damages received (whether by suit or agreement) on account of personal injuries or sickness. The term “damages received (whether by suit or agreement)” means an amount received (other than workmen’s compensation) through prosecution of a legal suit or action based upon tort or tort type rights, or through a settlement agreement entered into in lieu of such prosecution.”

 

Ben Sansone of the Missouri Injury Law Blog had recent post on the same subject. If you live in Missouri you should definitely check out his blog, it is excellent.

 

When Pit bulls Attack!

Pit bulls are now the 4th most popular dog breed according to this mornings Seattle PI.  The Seattle pit bull population apparently has exploded recently.  Pit bull were originally breed for fighting but have become popular fad according to city animal control officials. 

According to PI reporter Danial Lathrop pit bulls are filling local animal shelters, where they can represent as much as 30% of dogs. In Seattle, they are more likely than any other dog to be classified as a danger to the community where almost 20% of the dangerous-dog citations and warnings are for pit bulls.  Does this mean all pit bulls are dangerous, of course not.

I own an English Bulldog, who were originally breed to fight with bulls.  My Bulldog Harvey is not a danger to society and many pit bulls aren’t dangerous either. However, that doesn’t mean that some dogs are dangerous or can become dangerous without warning.

Washington has strict laws regarding dog bites. If you own a dog there is no first warning. If your dog bites someone you are strictly liable for all the damages regardless of whether it’s the first time or tenth time. 

It’s the dog owners responsibility to train and control their dog. If you choose to own a pit bull, then you must take special care to guard against pit bull’s tendencies to be aggressive at times. Many pit bulls aren’t aggressive, but there are many accounts of previously docile dogs suddenly snapping and attacking another dog or person. If cared for properly pit bulls are great loving and friendly dogs. It’s when people who should not own dogs mistreat a pit bull that the aggressive tendencies may surface.

Pit bulls are responsible for more fatalities than any other type of dog, according to statistics from the federal Centers for Disease Control and Prevention. Approximately seven or eight people are killed by pit bulls every year. That is one in every three people killed by a dog in the U.S. is killed by a pit bull. That’s scary!

One of my client’s was walking his dog when a pit bull attacked him and his dog without any provocation. My client and his dog suffered sever injuries costing many thousands of dollars in medical bills. Pit bull owners should beware of the devastating impact a dog attack can have on an innocent person.

If you own a pit bull I believe you have a duty to exercise extra vigilance in watching and training your dog. I don’t think pit bulls should run around the backyard unless your present and supervising the dog constantly. Pit bulls should not have anytime when they are outside unsupervised. Likewise when in public they should always be on a leash.

Dog owners remember it only takes one bite by your dog to find yourself on the hook for all kinds of medical bills and other damages.