financial responsibility law

  • A statute requiring a motorist, in the event of an accident arising out of the operation of a motor vehicle, which either results from an enumerated violation of law or in a judgment that is not paid as required by the state, to furnish evidence of ability to pay damages and usually to pay the original judgment as a condition for the subsequent operation of an automobile.

    Internal Revenue Service 1

1Internal Revenue Service, Internal Revenue Manual 4.42.6 Glossary, http://­www.irs.gov/­irm/­part4/­irm_04-042-006.html (last accessed Dec. 22, 2009).