Robert W. Wood

Lawsuits over fertility treatments and over destruction of eggs and embryos have exploded, yet the tax treatment of recoveries in these cases is not yet established.

Suppose that you purchase a home for $1M. You discover defects and you recover $500k from the seller or builder. Are you stuck with a tax bill on the $500k? It depends.

If you receive a Form 1099 that you do not report, you’re almost guaranteed an IRS notice. If the form is in error, you can explain it on your tax return.

Purchases at charity auctions yield tax deductions for the excess of the purchase price paid over the fair market value f the item, but celebrity presences don't count.

A $9 million winning bid for a charity lunch with Warren Buffett and Stephen Curry is more than a headline-grabbing gesture.

A successful Helms-Burton Act plaintiff is likely to have a good argument that settlement proceeds should qualify for long term capital gain treatment.

Discover the 10 key facts about IRS 1099 forms, including the different types and reporting requirements. Learn how non-employment income reports can impact your taxes.

Litigation funding involves plaintiffs or lawyers who "borrow" money before a case is resolved with the defendant. The money may be for case expenses, living expenses, etc. The money comes from litigation funders and is non-recourse, so if the case is unsuccessful, the plaintiff and lawyers do not have to pay it back. But taxes can get complicated. Most deals are not documented as loans, so it is not really borrowing. Most are structured as purchases by the funder, but to be taxed only in the future when the case is resolved. If the case goes bust, the plaintiff or lawyer does not have to pay back the funder, but must pay taxes then on the funds provided.

Comedian Carlos Mencia has been charged with 12 felony tax counts in California and stands accused of failing to report $8.7 million in income from 2019 to 2024. Most criminal tax cases are federal, but this state-level prosecution signals a potential shift in California's approach, that could reveal the Golden State's already harsh tax man doubling down on tough enforcement. Prosecutors allege that Mencia ignored 78 notices from the Franchise Tax Board regarding his unfiled returns. If true, that's a lot of notices, making it easier for the state to pursue criminal charges.

Legal fees are taxed to plaintiffs, so they need to be able to deduct them, even with a qualified settlement fund. Despite changes in the tax law, it is still possible.