Teacher, Environmentalist, Recovering Politician (
Questions, etc: mrjonathanlott@gmail.com. 
On @JudgeJudy, the show pays for the claims that result from the suits. But does anyone know how that works? Does the show pay the defendant, who then needs to pay the plaintiff? If so, since the show pays, is that considered taxable income for the defendant?
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I assume it works like The People's Court: Let's say you are the plaintiff. You sue for $1,240. You and the defendant are paid $500 each. Defendant's $500 goes to you. Also the $500 you get is considered payment towards the settlement/judgment. Defendant now owe you $240. (1/2)
(2/2) Before you go on these shows, both sides must agree to waive any legit legal action. Judge Judy, or whoever, is not acting in her capacity as a federal/state/district judge, but an entertainer, but both people must legally agree to her judgment. Proceeds probably taxable.
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The show pays the whole claim and in addition it can also, but not always, pay an "appearance fee." That would definitely be taxable, but is separate from the settlement. Judge Judy acts not just as an entertainer—the show is essentially a televised legally binding arbitration.
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Ohhh, okay. Yes, the show is legally binding, as both sides must agree to her judgment as a precondition to appearing. But the arbitrator needn't be a judge in real life, nor have any training whatsoever. It could just as easily be a 6-year old kid deciding the settlement.
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