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Settlement Proceeds Unrelated to Personal Injury or Sickness Are Subject to Taxation
Daniel and Brenda Stadnyk received a $49,000 settlement from Bank One after the bank erroneously stamped a check as “NSF.” The check should have been stamped as a “stop payment.” The Stadnyks sought to avoid federal income tax on the $49,000 settlement arguing that it arose from allegations sounding in tort because Mrs. Stadnyk was arrested after her check was returned NSF.
The Sixth Circuit held that the settlement the Stadnyks received was the result of Bank One’s breach of contract, making the settlement proceeds subject to federal taxation.
See: Stadnyk v. Commissioner of Internal Revenue, 367 Fed. Appx. 586 (6th cir. 2010).
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Related legal case
Stadnyk v. Commissioner of Internal Revenue
Year | 2010 |
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Cite | 367 Fed. Appx. 586 (6th cir. 2010) |
Level | Court of Appeals |
Injunction Status | N/A |