Business Cases

…Because paying more taxes than you owe on a settlement or verdict makes no sense.   

The Scenario: You and your business have been harmed. You filed a lawsuit and have now received a settlement or verdict – a victory. If you haven’t already, you are realizing that you must deal with the tax consequences associated with this recovery. Do you know what to do to minimize your taxes? DiMaria Law does and can help.

As an example, would you like to know if you can potentially claim this settlement/verdict as a Capital Gain at a 20% tax bracket instead of Ordinary Income at a 50% tax bracket?          

If you are able to claim this settlement/verdict as a Capital Gain instead of Ordinary Income, you could cut your tax burden in half.     

DiMaria Law can help you with this and many other potential alternatives. 

When do I want to start utilizing DiMaria Law for tax advice?

We can provide a valid tax opinion after the settlement is finalized, if we are not contacted earlier. However, you must get a written tax opinion before you file your tax returns for the year in which you received their settlement or award. This enables the you to use it in any future IRS audit and to avoid the substantial underpayment penalty.

Ideally, you should have a relationship with us whereby you can utilize us in the litigation from the inception of the litigation through to the ultimate written tax opinion that is provided. As stated above, a good tax attorney can assist with the correct language and characterization of damages that are requested and ultimately agreed upon. So many cases today are resolved via lump sum settlements making it even more important to properly characterize the damages that are paid.

DiMaria Law has years of litigation experience and act as a compliment to your underlying trial attorney. 

Personal Injury Cases

Common Questions About Settlements and Verdicts: 

1. Is my settlement taxable or partially taxable?;
2. Should I report the settlement on my tax returns?;
3. Do I need something in writing even if my attorney or accountant already told me it shouldn’t be taxable?;
4. How can I impact the non-taxability of my Settlement/Award?;
5. Can I deduct the attorney fees?;
6. What is the deadline for safeguarding myself?;
7. What happens if I get audited by the IRS?;
8. If the IRS disagrees with me, will I be subject to penalties and interest?;
9. Could the terms in the Settlement Agreement make it taxable?;
10. Even If I have a “physical injury” could I still be taxed on the money?;
11. Will the Settlement/Award be taxed as Ordinary Income or Capital Gain?
12. What can I do to protect myself? 

I’ve Been in Your Shoes. I know the Best Path Forward.

For better or worse, having been in your shoes, I have a unique perspective on what you are going through. Having been audited by the taxing authorities on my own personal injury case involving childhood sexual abuse, I know the measure of justice a resolution of your case can bring. I also know that coming into this money and feeling the obligation to safeguard it can be very stressful and confusing. In addition, I have recovered over $100,000,000 for the clients and business I have represented in litigation. I know the value of seeking the advice of a tax attorney and getting a good Tax Opinion. I feel so strongly about the value of this tax advice that I have shifted much of my practice and using my legal expertise to help others through the process post-resolution of their case. Helping survivors of various personal injuries sort out and safeguard themselves on tax issues related to their settlements is very rewarding niche area that I thoroughly enjoy. A little planning and preparation can go a long way in helping to avoid later surprises in the eyes of the IRS...           

 “Generally, the most important factor is the extent of the taxpayer’s efforts to assess the proper tax liability.” (Treasury Regulation 1.6664-4(b)(1)).

Who We Are, What We Do

Most of our clients are not simply looking for us to inform them as to whether their award is taxable, but rather to find ways to save them from having to pay taxes on their award. Very few tax lawyers, let alone lawyers in general, specialize in this muddled area of the law.  We do. Litigation is stressful enough without the anxiety of excessive taxes or not being prepared for an IRS Audit. DiMaria Law works to help you keep more of your settlement. After all, you would not have resolved your case for half of what it is worth, so why risk needlessly paying potentially half of it in taxes?

Throughout litigation or upon settlement of your case, the tax characterization of this award has important consequences. DiMaria Law works side-by-side with your legal team to make sure you get to keep as much of your award as possible. We can help from the inception of the case, to helping draft settlements, to doing a advising once your case has settled.

We have done extensive research and been fortunate enough to represent and do tax opinions for many of clients who have been in your position. We understand the nuances of the law and can help you use it to your advantage.