Ezel / IRS Rulings / 1346010
Chief Counsel Advice 1346010 Released November 15, 2013 Advice

CCA 1346010: Compensatory damages for physical injury or sickness

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This page covers one taxpayer's ruling from 2013, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2013
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

The IRS advised that compensatory damages received because of personal physical injury or sickness are excludable from gross income under IRC § 104(a)(2). The advice expressly included lost wages among the compensatory damages covered by that conclusion. It cited Revenue Ruling 85-97 and Schleier, 515 U.S. 323 (1996).

Ruling snapshot

  • Question: Are compensatory damages received for personal physical injury or sickness, including lost wages, excludable under IRC § 104(a)(2)?
  • Outcome: Advice given
  • Key authorities: IRC § 104(a)(2); Rev. Rul. 85-97; Schleier, 515 U.S. 323 (1996)

Full text (IRS public release)

ID: CCA_2013072912563746 [Third Party Communication:
UILC: 104.03-00 Date of Communication: Month DD, YYYY]

Number: 201346010
Release Date: 11/15/2013
From:
Sent: Monday, July 29, 2013 12:56:37 PM
To:
Cc:
Bcc:
Subject: Your Question

Once it has been determined ( as in your case) that the damages were received on
account of personal physical injury or physical sickness, all compensatory damages,
including lost wages, are excludable from gross income under section 104(a)(2). See
Rev. Rul. 85-97 and Schleier, 515 U.S. 323, 330 (1996).

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