Rev. Rul. 93-88 expands exclusion for employee discrimination damages.
The Tax Adviser › Vol. 25 Nbr. 5, May 1994
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Summary
IRS and Tax Court interpretations of United States v. Burke have looked to the type of damages available to determine whether the awards from federal employment discrimination suits can be excluded from income taxation. The US Supreme Court in Burke interpreted Internal Revenue Code section 104(a)(2) to limit the personal injury award exclusion to claims for which tort-type damages are available. Statutes that provide for compensatory awards alone, such as back pay, are taxable. The availability of other awards, such as liquidated or punitive damages, will make the compensatory award excludible, though punitive damage awards will be taxable.
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Rev. Rul. 93-88 expands exclusion for employee discrimination damages.
Rev. Rul. 93-88 clarified and expanded the exclusion from gross income for back pay and compensatory damages received by employees for employer violations of Federal discrimination statutes. This ruling covers discrimination based on race, color, religion, sex, national origin and disability.
Background Sec. 104(a)(2) allows an exclusion for the amount of any damages received on account of personal...See the full content of this document
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