Approximately $300,000 was stolen from me. This snowballed into a much bigger loss of literally millions as it caused me to lose my home, car and business. The DA chose to only pursue a portion of the theft and they made a deal with the embezzler to avoid trial. I am receiving $20,000 in restitution over two years. Along with the first check the felon's lawyer wrote to me that he would be personally informing the IRS of the restitution and sending in something (1099?). Please let me know what the real story is here. Does the IRS care what he sends them? Am I liable for taxes on this money? If so under what category? Income? My business was an LLC/sole proprietorship so my taxes have always been a 1040 with a Schedule C. Thank you.