Payment for Being in Clinical Trial Isn’t Excluded From Taxable Income

A clinical trial sponsor’s payment to a participant wasn’t excludable from gross income on his tax return as a gift or compensation for sickness or an injury, a federal appeals court affirmed June 30 in an unpublished opinion (O’Connor v. Commissioner, 2015 BL 208574, 9th Cir., 13-71413, 6/30/15).

The U.S. Court of Appeals for the Ninth Circuit agreed with the U.S. Tax Court’s Nov. 14, 2012, ruling that Daniel Hugh O’Connor hadn’t demonstrated that a payment of $5,500 for his participation in a 1983 gout study qualified under either 26 U.S.C. §102, which covers exclusion for ...