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The United States Court of Appeals for the District of Columbia Circuit has held the federal government can not longer tax plaintiff’s settlement proceeds relating to emotional distress and other intangible injuries. In doing so, the Court stuck down a current portion of the tax code allowing such taxes as unconstitutional. While this ruling only currently applies to Washington D.C., it implications could be felt nation wide should the IRS choose to appeal the ruling to the United States Supreme Court and they affirm it as expected. For more information on the unconstitutional tax read this article.

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