Tuesday, June 8, 2021
Jeffrey H. Kahn (Florida State), Liability Insurance: A Reply to Professor Utz, 171 Tax Notes Fed. 473 (Apr. 19, 2021):
In this article, I continue my debate with Professor Stephen Utz over the tax treatment of liability insurance, arguing that there are policy justifications for the current tax treatment of liability insurance payments. ... I previously published an article arguing that insurance proceeds payable under a policy insuring a specified tax treatment (tax insurance) are excluded from gross income [Hedging the IRS — A Policy Justification for Excluding Liability and Insurance Proceeds, 26 Yale J. Reg. 1 (2009)]. That piece led to an interesting back and forth between myself (Justifying the Exclusion of Insurance, 125 Tax Notes 1216 (Dec. 14, 2009); The Tax Treatment of Liability Insurance Coverage, 163 Tax Notes 1381 (May 27, 2019)) and Professor Utz (Designating the Tax Treatment of Litigation-Related Costs, 21 Fla. Tax Rev. 533 (2018); How Insurance Recoveries Are Taxed Under the IRC, 169 Tax Notes Fed. 941 (Nov. 9, 2020)) on the tax treatment of liability insurance proceeds.
This article is my latest contribution to that debate.