Comments on: Are the Catholic Church Priest Sexual Abuse Settlements considered taxable income?

By: mudbug

mudbug — Wed, 26 Aug 2009 09:30:59 +0000

Possibly. Some are. some are not. It depends whether or not the Diocese issues a Form 1099-MISC to the payee.
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If the form is issued then the income is taxable and 30% is owed in taxes.

By: Bostonian In MO

Bostonian In MO — Wed, 26 Aug 2009 09:16:59 +0000

Settlements for physical injury or illness are not taxable. However if any portion is earmarked for interest or punitive damages those portions are fully taxable as ordinary income.

A sexual assault will result in some physical injury to the victim. Even though this injury may be minimal from a purely medical standpoint it is a physical injury by any measure. There’s nothing in the law that states that the injury must be disabling, catastrophic, or significant, only that it occurred.

The genders of the attacker and victim are irrelevant. Whether the assault is heterosexual or homosexual in nature makes no difference.

Therefore the sex abuse settlements are NOT taxable income. (But as noted above, any portion earmarked for interest or punitive damages IS taxable as ordinary income.) Not sure who gave this a TD rating but they obviously know nothing about US tax law.
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By: marco l

marco l — Wed, 26 Aug 2009 08:26:59 +0000

that is totally unacceptable. What about the protestants driving their fancy cars owning schools etc?
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By: ketchup

ketchup — Wed, 26 Aug 2009 07:46:59 +0000

No. It’s a "settlement".
Settlements, insurance pay offs and temporary loans are not taxable.
(although the loans may have changed in the last few years, not sure on that.)
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By: regerugged

regerugged — Wed, 26 Aug 2009 07:07:59 +0000

No.
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