Dose the irs take money from a settlement?

Asked over 1 year ago - Miami, FL

car accident

Attorney answers (7)

  1. Joseph Jonathan Brophy

    Contributor Level 20

    9

    Lawyers agree

    Answered . No. A settlement for personal injury is not taxable.

    Any opinions stated in response to Avvo questions are based upon the facts stated in the question. Responses to... more
  2. Christopher Steven Hoffmann

    Contributor Level 14

    8

    Lawyers agree

    Answered . Although a personal injury settlement is not taxable, that does not mean the IRS or Department of Treasury cannot impose a lien upon it. Consult your attorney and discuss this issue.

    24 Hour Attorney Call Center (314) 361-4242 or visit us on the Web at http://www.hoffmannpersonalinjury.com.
  3. Jeffrey Ira Schwimmer

    Contributor Level 19

    6

    Lawyers agree

    Answered . Monies obtained by settlement or verdict as compensation for personal injuries is not taxable.

  4. Samuel Aaron Coffey

    Contributor Level 10

    4

    Lawyers agree

    Answered . Personal injury settlements are usually not subject to federal income tax. However, if there is money paid for confidentiality this is taxable. There is a famous lawsuit involving basketball player, Dennis Rodman, that involved taxation related to confidentiality.

    Samuel A. Coffey, Esq. ABRAMOWITZ, POMERANTZ & COFFEY, P.A. Belle Terre of Sunrise, Suite 101 7800 W. Oakland... more
  5. Christian K. Lassen II

    Pro

    Contributor Level 20

    4

    Lawyers agree

    Answered . It depends. If a portion of the money was lost wages, that portion would be taxed, as it is income under the tax code.

  6. Ty EG Hinnant

    Contributor Level 7

    Answered . In general, settlement proceeds are not taxable by the federal government. For your specific case, contact a Personal Injury Attorney.

  7. Jason M. Melton

    Pro

    Contributor Level 13

    Answered . No

    When you are compensated for injury, pain or suffering you have not EARNED anything, therefor it is not income, thus not a taxable event. It is merely an attempt to replace something that was taken from you.

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