$6M Qui Tam Award Is Income, Not Capital Gain: Tax Court

Law360, Los Angeles (February 24, 2014, 7:39 PM EST) -- A tax court judge ruled Monday that the awards given to citizens who file qui tam suits must be taxed as ordinary income, not capital assets, shutting down a couple’s bid to keep more of their $6 million award from a whistleblower Medicare fraud suit settled by Medtronic Inc.

U.S. Tax Court Judge Diane L. Kroupa sided with the Commissioner of Internal Revenue, who sought from Craig and Michelle Patrick $811,597 in unpaid taxes for 2008 and 2009 on awards the couple received from the False...
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