Taxpayers who suffer from physical injuries or physical sickness can generally take advantage of a special provision in the Code that makes such damages non-taxable. See I.R.C. § 104(a)(2). Generally, this can be an easy determination. However, what happens if the taxpayer is engaged in a lawsuit and receives damages through a judgment or settlement? How does the IRS know if those damages are subject to non-taxation under I.R.C. § 104(a)(2)? Generally, fede