Tax,
Law Practice
Apr. 21, 2021
Taxing legal settlements, legal malpractice and more
A recent Tax Court decision may provide some lessons for legal settlements.





Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
I recently wrote about how I thought legal malpractice settlements should be taxed. Shortly thereafter, the Tax Court decided Blum v. Commissioner, T.C. Memo. 2021-18. Its harsh taxable holding suggests that I may have been wrong. I said a legal malpractice settlement should be tax free for an underlying PI case, where damages would have been tax free if the PI lawyer had not missteppe...
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