Robert W. Wood is a tax lawyer (www.WoodLLP.com) who handles tax disputes, writes tax opinions, advises on crypto, disclosures and more. He is best known for advising plaintiffs on the tax treatment of lawsuit settlements and legal fees, serves as an expert witness, and writes widely for tax publications on these and other tax topics. You can reach him or his archive of tax articles at Wood@WoodLLP.com.
How IRS Taxes Defamation Legal Settlements
Suits for damage to reputation can be about personal reputation, professional reputation or both, with legitimate opportunities for capital gain tax treatment.
Giving Back Pay Is Hard, Getting Taxes Back Is Even Harder
IRS does not allow undoing a prior transaction as if it never occurred. You cannot amend your prior year tax return to account for a later event either.
IRS Forms 1099-NEC And 1099-MISC Trigger Different Taxes
Form 1099-MISC is for miscellaneous income. But Form 1099-NEC is for payments to independent contractors and adds self-employment tax.
Even California Non-Residents Can Face California Taxes
Income from California real estate is always California-source income. Income from tangible property is California-source income if it was physically located in California.
How Qualified Settlement Funds For Lawsuits Defer Taxes
QSFs allows plaintiffs time to evaluate structured settlements without involving the defendant. and to delay income tax effects until funds are disbursed.
Error On Your IRS Form 1099? What To Do Before You File Taxes
You can approach the issuer and ask the issuer to reissue it correctly. If the issuer of the Form 1099 has already sent it to the IRS, ask for a “corrected” Form 1099.
Leaving California Taxes Behind Is Tricky, & Not Just For Billionaires
If you spend more than 9 months in California, you are presumed to be a resident. If you spend 6 months or less, you might qualify as a seasonal visitor.
Lawsuit Settlement Form 1099 Requires Special Care On Your Taxes
Many settlement agreements don't say anything about tax forms. Yet many defendants issue a Form 1099 to the plaintiff, and a Form 1099 to the lawyer, often each for 100%.
California Is #1 State People Leave—But Tax Man May Follow Them
If you aren’t careful, you can end up with an audit from California’s tough Franchise Tax Board (FTB). Some people who exit still get tax bills and end up in an audit.
If George Clooney Gives Up U.S. Citizenship, He’d Face Big IRS Exit Tax
American citizens living abroad still must file U.S tax returns and pay taxes. Giving up citizenship triggers IRS Exit Tax, which in George Clooney's case would be big.