Tax Law Expert Rob Wood ...To Tax Gross Up Or Not To Tax Gross Up?
Wednesday, June 2, 2010 at 06:13AM (California Tax lawyer) How and when we are paid, whether for services or property, can influence the amount of tax we have to pay. That seems so obvious that no one would need to say it, much less prove it. Nevertheless, in civil litigation, the extent to which you can get damages for adverse tax consequences has been a thorny subject. We all know that tax consequences dramatically impact the value of what we receive. Yet, many courts have been loath to gross up the amount of a plaintiff ’s damages by the amount of corresponding taxes the plaintiff must pay. This is a damages question not a tax question....
Robert W. Wood practices law with Wood & Porter, in San Francisco (www.woodporter.com), and is the author of Taxation of Damage Awards and Settlement Payments (3d Ed. 2008) and Qualified Settlement Funds and Section 468B (2009), both available at www.taxinstitute.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
