I just received a letter from the IRS regarding my 2006 return. They say I didn’t pay taxes on a sexual harrasement settlement. The people that paid the settlement reported to the IRS twice, using 2 different addresses (therefore stating I received twice the amount that I actually did receive). I never received a 1099 on this and did not claim it on my return. Any advice on what I should do. I have put in a call and am waiting to hear from an accountant.
Posts Tagged ‘Settlement’
Who is the best tax attorney in the city of chicago to handle the settlement of a 45K tax lien.?
25
May
Do I have to pay IRS taxes on settlement money I received in 2006?
24
May
Back in 2006 I received 73,000.00 from a settlement before attorney fees, after which I recieved 43,000.00. In this type of settlement if my Mother would have been alive she would have recieved this money,but since she is deceased my sibblings and I are the next in line in the family tree to recive the money. My brother and I both called the IRS to discuss the 1099 form with them and we both recieved the same answer which was that “we were recooperating a loss and and it could be classified as an inheairatance” and that “we did not have to do anything”. She then explained the article and section # to support her answer that I neglected to document.
I had Jackson Hewitt prepare my tax return for 2006 and showed them my 1099 form I that I had recieved from the attorney.I also told them that I had spoke to an IRS person at the 1-800 number and told her what I was told by the IRS rep.
Now, I recieved a letter from the IRS saying I owe taxes.I felt confident I was filing my taxes correctly after speaking to an IRS rep. and having Jackson Hewitt prepare my taxes with all the documents in front of them.
My Question’s are: Did Jackson Hewitt fail to file a form with my tax return to report this non taxable income and was I given wrong information by the IRS rep.at the 1-800 number when I called?
Thanks
Taxes on lawsuit settlement?
13
May
After hurricane Katrina, we received no money from our insurance company for our claim. Because of this, we entered into litigation. Eventually we reached a settlement. Our CPA did our taxes and we paid taxes on the settlement (including the portion the attorneys got). Since then, many people (including another CPA) have told us that this should not be taxable. Any comments? We settled out of court with the company – it was not a lawsuit victory.
Is this taxable? The CPA firm is local and handled lots of similar claims and settlements, so we figured they knew the right way to proceed. Is it cut and dried? Is there room for interpretation in this area by different CPAs?
Let me know.
Thanks
Tax Liability – no 1099 received for wrongful death settlement?
11
May
Its after 1/31 and no 1099 rec’d for family settlement resulting from wrong ful death lawsuit which was settled last year by an arbitrator. There were no punitive damages. The claim was for negligence and resulting fall/death of our mother.
The attorney said we might have to report as income and made us fill out a W 9 form but he was unclear on whether it was reportable. He never sent 1099. Do we have to report this as income and pay taxes on this? with or without 1099? How is this different than when we received monies from our mother’s estate that was not taxed.
What are some good strategies to protect money resulting from a settlement?
30
Apr
If a settlement is reached for six figures, what are some good strategies to protect that money. I understand FDIC bank insurance and want to know if that is really a good place to hold money. How will it change my tax situation? Any other good ideas to make that money work for me without to much risk?
Do you pay income taxes on a wrongful death settlement?
26
Apr
I have read numerous answers on this. The IRS rules seem very vague. The answer seems to depend on the claims which can be divided into 3 categories (1. Injury 2. loss income 3. Punitive). For Injury it seems that this is not taxable. For loss of income or services this might be taxed as had the person lived these things would be taxed. Punitive claims are certainly taxed. The big problem is that most settlements don’t go into detail about what the settlement covers. Any attorney worth his salt would write out a settlement that would cover any and all claims and not go into detail about how each portion of the settlement is going to a specific claim. Maybe I am misunderstanding this thing completely.
My father income was from disability insurance which was not taxed.
Would I pay tax on a law suit settlement?
25
Apr
I sued my abuser, who molested me and who was convicted to 8 yrs in jail for damages, (i believed it was punitive but also for me to get money to get therapy, I saw a therapist to get the judgement) and was awarded part of my the overall settlement, now myself personally would definately not feel the gov’t has any right to touch this money since it was to repair my deep suffering, but since the gov’t is heartless, i need input, i just wanted some of your thoughts b4 i hear back from my lawyer (he should know)
and if i do have to pay tax on this money, would it be treated as real income? that case i would lose most of it 
thanks
Should I tell my personal injury attorney to go higher on a settlement offer?
23
Apr
My attorney gave me a figure before he sends the settlement letter to the defendants. Doesn’t my attorney expect me to give a higher figure? In terms of percentage, how much higher?
I fell behind on my Chapter 13 payments. I have a settlement date on my house in 3 weeks..what should I do?
18
Apr
I filed for chpt.13 in Nov 2006. I am paying a 1500.00 mortgage, and a 1400.00 payment on the Chpt. 13 repayment plan. I have had tremendous trouble keeping up with the trustee payments.My Bankruptcy lawyer contacted me and said the trustee is going to close my case on monday unless I pay a back fee of 4500.00. Needless to say I dont have the money. I have a house on the market and a closing date of Sept 14th. The lawyer suggested that I let the trustee close the case and go to settlement on the set date to save me some money. My question is I have a vehicle and back taxes in the Chpt.13 plan. How does that factor in after the sale of the house? The lawyer suggests getting a tax attorney for the back taxes I owe. So what about the car? Also, since the trustee is going to drop the plan on Monday, what does this mean in terms of my credit and how it is reflected on my credit report. Is it still reflected as an open bankruptsy? Also, what about the money i paid into the plan? Help!
Is an insurance settlement considered taxable income?
24
Mar
Wife was in an auto accident. Our attorney negotiated a small settlement with the insurance company. IRS claims we owe tax on the settlement because our attorney reported the settlement amount as nonemplyoyee compensation paid to us. I thought insurance settlements were nontaxabel income. Need help or the proper publication in the tax code to cite when I respond to the IRS. Thanks
My ex is an attorney and paid back payroll taxes for his LLC, is this part of the property settlement?
16
Mar
He already had his office but dissolved his partnership and reformed his LLC, first he claimed it was done before we were married, but when the judge ruled in my favor over interim support….he changed that to after we were married and is now trying to include the back payroll and income taxes going back to 2001 (we were married in 2004). Can he do this?
What is taxable in Personal injury settlement under the US tax code?
06
Mar
I’m suing my landlord/his insurance company, because a few years ago I fell down a common stairwell after the landlord had removed the carpeting, but not the nails. I have a good personal injury attorney, but she’s not sure about tax questions.
If an attorney took all of a settlement in a civil rights case who pays the taxes?
06
Mar
Settllement of $350,000 received nothing due to attorneys fees. Who pays the taxes?
Tax liability from litigation settlement?
22
Feb
I recently received money from an arbitration settlement. The reward was based on a 1998 Earthquake insurance claim that was never resolved. In my original court filings, I had only asked for $$ to cover damages to the rental property I own. In the settlement, the Insurance company did not admit to fault. I have already spent $$ over the preceding years to repair my property. The reward I received covers the expense I have already incurred and provides for additional funds for possible future improvements to the rental property that I may, or may not incur. What portion of the reward do I have to pay taxes on? Does it only matter it is compensatory vs. punititive? I have to pay taxes on punitiive and not compensatory?