Jottings By An Employer's Lawyer

Saturday, September 27, 2003

The Thorny Issues Related To Taxation On the Settlement of an Employment Law Case


As rules have tightened on the taxation of settlements of employment law cases, the latest fight is over taxation to the plaintiff of a separate payment of attorneys fees. A decision by a federal district court in Connecticut prompts a story pointing out this is an issue which has split the courts of appeal almost evenly. Thomas Scheffey of the Connecticut Law Journal has the story reprinted at law.com. Senior District Peter Dorsey found that the employee must pay tax on the attorneys fees, even where the settlement agreement required them to be paid separately to his attorney.


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