Tax
Sep. 24, 2024
Settlement agreements without tax language ask for trouble
Proper settlement agreement wording is crucial to avoid tax issues and ensure favorable tax outcomes.
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.
Almost every settlement includes a full release of claims, with the plaintiff compensated for relinquishing all rights. A release may recite some of the plaintiff's claims, but it is predictably broad. It might say any taxes on the settlement are solely the plaintiff's responsibility, but should it say more?
If there is a chance to add tax language to the release before signing, take advantage of it. It should not be a tough sell to convince the parties-...
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