Capital Gain for Relators Under the False Claims Act
Monday, April 12, 2010 at 09:47AM 
Robert W. Wood practices law with Wood & Porter in San Francisco (http://www.woodporter.com) and is the author of Taxation of Damage Awards and Settlement Payments (4th ed. 2009), Qualified Settlement Funds and Section 468B (2009), and Legal Guide to Independent Contractor Status (4th ed. 2007), all available at http://www.taxinstitute.com. This discussion is not intended as legal advice and cannot be relied on for any purpose without the services of a qualified professional. Federal False Claims Act cases involve relators who come forward with evidence of fraud and enter into what is usually a long-term contractual relationship with the federal government leading to a relator share. In this article, Wood asserts that the resulting relator share in those cases should be taxed as capital gain, not as ordinary income.
Copyright 2010 Robert W. Wood.
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