The phenomenon is all about the care of Perez vs.

Commissioner of Internal Revenue in

determining the true meaning of damages of the SC. The determination of which is important in
arriving with the taxable amount against the petitions compensation
As a background, Perez decided to engage in egg donation company as a misnomer and agreed
to undergo physical pain, and suffering in exchange for $20,000.00 which she believe was tax
free.
On the other hand, CIR, the respondent alleging and invoking Sec. 1.104- 1(c01), Income Tax
Regs. Definition of damage, says that Perez should pay for tax and that her risk and Suffering is
not included in the better of Section (046) (2) of ITR.
B.) Nichelle Perez is the Petitioner in this case. She was a misnomer who underwent series of
physical pain and suffering in exchange for the money she believed to be tax free. It turns out,
the CIR destroyed her contention to the Same and even sent her a notice of deficiency in
nonpayment of tax. From then, the case went on.
The commissioner of Internal Revenue. The commissioner himself, representing the
commission was the respondent of the case. His role thereby is to set the exact definition of
damages w/c is the key issue of the case. Bringing up other cases on provisions in support for
his defense made the case interesting and informative.
Supreme court who derived at a very wise and lardlike decision.
C.) Scope and Definition of damages
In the court ruling, they were able to cite Sec. 1-104 – 1 (c) (1), the definition of damages as a
xxx an amount received through prosecution of legal recit or action, or through a settlement
agreement entered into in lien of prosecution “The issue above became a determinant and
measure of whether or not what Perez claim of damages are excludable in the prevent
interpretation of Section 104 (a) (2) of ITR.