Regular Lounge readers may recall the Taxing Eggs Mini-Symposium we held here last February, which gathered a number of tax experts to discuss Perez v. Commissioner, No. 9103-12 (Feb. 14, 2014) (Holmes, J.), the first case addressing the inclusion in taxable income (and perhaps the proper characterization) of compensation received for the sale or donation of human eggs and related services.
The decision was filed today and, as predicted by our panel of experts, held that the money received by Perez was not “damages” under I.R.C. section 104(a)(2) and must be included in gross income. Because both parties agreed that the payment was for services, however, the case doesn't address any capital gains issues.
From the opinion, which is available here:
We see no limit on the mischief that ruling in Perez’s favor might cause: A professional boxer could argue that some part of the payments he received for his latest fight is excludable because they are payments for his bruises, cuts, and nosebleeds. A hockey player could argue that a portion of his million-dollar salary is allocable to the chipped teeth he invariably suffers during his career. And the same would go for the brain injuries suffered by football players and the less-noticed bodily damage daily endured by working men and women on farms and ranches, in mines, or on fishing boats. We don’t doubt that some portion of the compensation paid all these people reflects the risk that they will feel pain and suffering, but it’s a risk of pain and suffering that they agree to before they begin their work. And that makes it taxable compensation and not excludable damages.
I note that the case includes citations to articles by three of our Taxing Eggs participants: Bridget Crawford, Lisa Milot, and me.
(Oh my, this post does contain the three cardinal sins of blogging: content links, use of the first person, and self-promotion. Oops, I just did it again).
(HT: Lisa Milot)
Related Posts:
Taxing Eggs: Introduction to Perez v. Commissioner
Taxing Eggs: Lawrence A. Zelenak
Taxing Eggs: Bridget Crawford and Crawford, Part II
Taxing Eggs: What Have We Learned?
Taxing Eggs: Bridget Crawford III
Taxing Eggs: Lisa Milot Responds
Kim
Not everyone agrees that content links are bad! Nor, is use of the first person when relevant and useful ... although you are self promoting a bit here, no? But here, there is arguably a legitimate reason to refer to the citation: the court cited your work and thus, as the first case to decide the issue, advanced the legal premises you (and others) advanced. Well done!
But, might you also tell us: are you a celebrity just like Stephen Colbert, with millions paying attention to you, like a veritable rock star? Do you really think that masses are interested in every aspect of your life? Do you want them to be?
Might we go a bit too far in mocking criticism of self referential, self indulgent, self aggrandizing "legal blogging" ... that isn't legal blogging at all?
Congrats that a court cited something you wrote in a law review article. That is the type of "legal blogging" that most of us prefer (I suspect) and support.
Posted by: anon | January 22, 2015 at 07:28 PM
Thanks for the kind words, anon, but even those living in my own household are barely interested in my life, I'm afraid :-) It just isn't that exciting most days.
Posted by: Kim Krawiec | January 22, 2015 at 07:35 PM
Like most of us "rock stars," Kim. :)
Posted by: anon | January 22, 2015 at 07:56 PM