disability payment

[fliszt]

Client sued gov for agent orange disability several years ago and has just received a notification that he is 40% disabled and was paid $41k lump sum. I can't find in the pubs or TTB where it would define this as taxable or non-taxable event. In TTB 3-29 lists some circumstances. Will it be up to the government to classify this as taxable or non-taxable?

[BOB W]

Client sued gov for agent orange disability several years ago and has just received a notification that he is 40% disabled and was paid $41k lump sum. I can't find in the pubs or TTB where it would define this as taxable or non-taxable event. In TTB 3-29 lists some circumstances. Will it be up to the government to classify this as taxable or non-taxable?

Larry> I would look at this as a Personal Injury settlement, non taxable. I know if it was my client I also would be looking for a definitive yes no, but it does seem like it is a personal injury settlement.

[Zee]

My guess is it will be non-taxable. Did he actually sue, or simply win an appeal with the VA? VA disability claims take years to determine, and most often many appeals since they are routinely denied over and over again. Once an appeal is won, the disability is paid retroactively from the date of the claim. Since the lump sum represents a retroactive payment of VA disability, it should be non-taxable. If he actually won a court case, I'm not sure, but it most likely is non-taxable.

[fliszt]

Thank you all. I really

appreciate your replies. Yes the client has been on this for some 10 years or so. Yes, it was one denial after another. He had hired an attorney to pursue his case since it was legitimate. Vietnam vet right in the line of fire and he was exposed, etc. So last week he open an envelope and there was the check. He called the attorney who knew nothing of the settlement. I don't know if there will be a future of monthly checks or not. Perhaps the check he received will be it.
But anyway, thanks again for your help.
Larry

[Zee]

Sorry for the double-post...don't know what happened.

As a Vietnam Vet, I'm nearing the end of a four-year ordeal on VA benefits for a hearing aid. I had to appeal many, many, times and heard last week that I won the appeal. I have tinnitus which is an automatic 10%, and for the regular hearing loss I don't expect them to grant anything...that's just the way they operate. Your client probably engaged an attorney to represent him during the Appeals process since that is always optional. I used the Veterans of Foreign Wars (which is free...but you kinda get what you pay for).

I'm still awaiting some for final confirmation. A different area handles the determination of the disability amount (more time). The VA seems to just keeps time flowing hoping Vets will die.

I just want to get fitted for hearing aids out of this process. A 10% disability is a little over $100 month.

I don't plan on paying any taxes on the retroactive receipt of the VA disability. VA disability isn't taxable. IMHO, the payment your client received isn't a settlement, again it's a retroactive payment to the date of his disability application. He will now be entitled to a monthly disability check in the $500+ range for a 40% disability. He should have been told that. Here's a chart:

http://www.military.com/benefits/veteran-benefits/va-compensation-tables

Incidently, the VA denied Agent Orange Disability for many years. My understanding that it has reached the point where anyone exposed to Agent Orange in Vietnam qualifies.

[fliszt]

Zee,

you have supplied a lot of information. Thank you!! Sorry about your loss. I too have hearing deficit from jet engine noise from being a mechanic in the Corps back in the 60's but not as severe as yours.

I called the client after my posting and reading the replies. He verified it was a "back pay" and will be getting a monthly check from hence forth. He's a very bitter person with a good heart and would give you the shirt off his back if asked. Luckly, I came out of the Vietnam era with all limbs intact. (brain slowness once in a while)

I saw the website you posted and will forward it to my client.

I hope you have a very nice day and thanks again to all my colleagues.
Larry

[Zee]

you have supplied a lot of information. Thank you!! Sorry about your loss. I too have hearing deficit from jet engine noise from being a mechanic in the Corps back in the 60's but not as severe as yours.

I called the client after my posting and reading the replies. He verified it was a "back pay" and will be getting a monthly check from hence forth. He's a very bitter person with a good heart and would give you the shirt off his back if asked. Luckly, I came out of the Vietnam era with all limbs intact. (brain slowness once in a while)

I saw the website you posted and will forward it to my client.

I hope you have a very nice day and thanks again to all my colleagues.
Larry

I know you're understanding. Dealing with the VA is extremely frustrating and would probably make the Pope bitter.

[JohnH]

If it would make the Pope bitter, does that mean he would still be clinging to his guns and religion as well?

[Zee]

If it would make the Pope bitter, does that mean he would still be clinging to his guns and religion as well?

LOL...ok change that to "dealing with the VA on benefits would make the Almighty (whoever that is) bitter".

[Davc]

He called the attorney who knew nothing of the settlement.

That was a mistake..........

[Zee]

That was a mistake..........

Why was it a mistake? I sure hope he didn't engage the attorney on a contingent fee basis.