I'm an uninsured individual who initiated a case pro-se in TX after an injury in a car accident. The defense attorney negotiated a settlement to which I will agree. However, they are asking that I provide my social sec. number. Is this required by law? The settlement is only a couple thousand, and there is no punitary settlement, just recompense for injury. I'm concerned about privacy issues.
Answer
Their reason for asking is due to IRS reporting requirements (see Form 199-MISC). I know that they have to send them to attorneys when settlements total $600 or more. In regard to individuals, I am not sure; but I would expect that they have to report the payment made to you especially if a portion of the settlement was for lost wages.
Answer
Yes if u want to be paid..it is an expense for the insurer and to obtain a deduction, it has to prove who was paid...however, such payments are NOT taxable to you...
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