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Oxnard, CA asked in Tax Law for California

Q: I RECEIVED NOTICE FROM irs SAYS I NEED TO FILE TAXES FOR SETTLEMENT CHECK. I HAVENT RECVD CECK HOW WOULD I GET CHECK INF

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4 Lawyer Answers
Terrence Jay Moore
Terrence Jay Moore
Answered
  • Tax Law Lawyer
  • Santa Ana, CA
  • Licensed in California

A: I suggest contacting the IRS and find out the proposed amount of income for the year in question. Ask them to send you copies of their source of income. Then, you can determine if the IRS position is correct or not. Either way, file a return stating your correct position.

Zaher Fallahi
Zaher Fallahi
Answered
  • Tax Law Lawyer
  • Los Angeles, CA
  • Licensed in California

A: Please ask the IRS for a transcript showing the issuer of the 1099. If it is issued in error, ask then to correct the 1099 and send a copy of (1099 on the top corner says "corrected")to the US. Good luck.

Zaher Fallahi
Zaher Fallahi
Answered
  • Tax Law Lawyer
  • Los Angeles, CA
  • Licensed in California

A: The terms of a settlement should have been discussed with you, your attorney and the losing party before the settlement reached, taking into consideration all relevant facts and circumstances, in an effort determine the underlying components of the cause of action and corresponding award allocated to each. This is very crucial because some settlements may be non-taxable and exempt under the IRC 104; physical injury, return of capital, etc. Good luck. Zaher Fallahi, Tax Attorney, CPA.

Zaher Fallahi
Zaher Fallahi
Answered
  • Costa Mesa, CA

A: The terms of a settlement should have been discussed with you, your attorney and the losing party before the settlement reached, taking into consideration all relevant facts and circumstances, in an effort determine the underlying components of the cause of action and corresponding award allocated to each. This is very crucial because some settlements may be non-taxable and exempt under the IRC 104; physical injury, return of capital, etc. Contact the attorney who handled the case. Otherwise, I would advise you retain a tax attorney to determine whether IRC 104 applies to all or part of the settlement. Good luck. Zaher Fallahi, Tax Attorney, CPA.

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