Exxon Settlement

[JonesTaxPro]

This is going to be fun:) TP received settlements from Exxon-Valdez spill many years ago. Didn't receive 1099. How do I claim and do I have to claim. Tricky part - There are lawyer fees (deduct or not- assuming no) Also, had fed withholding taken out. Now comes the fun part. TP owes IRS from back taxes, so withholding was confiscated by the IRS. Do I need to claim the settlement as income as Fed WH was taken out and applied to back taxes already. Really could use some input on this one. Plus wife will claim injured spouse, so this doesn't affect her. Thanks.

[Pacun]

Why was he paid by Exxon? Was his body covered with black oil and he could work? Was he so sad to see that his blue sea was now black? Did he work cleaning up? Was he farm-raising whales and he lost his investment?

The lack of 1099 doesn't mean he doesn't have to report it. If withholding was garnished, he cannot claim them on his return, unless he uses line 21 to re-report it.

[samingeorgia]

Wow, the Exxon Valdez had to have been 20 years ago! Our justice system sure is efficient, eh?

I would think the taxability would turn on the nature of the claim -- property damage, personal injury, business loss, what?

I fail to see how there could have been tax withholding but no documents such as a 1099. I also find it odd that IRS would apply withheld taxes on a current payment to an old debt, even before the return was filed.

More information is required.

Interesting trivia: during WWII, German U-Boats sank approximately 3,000 ships; many of these were oil tankers. This does not take into account shipping losses in the Pacific. Assuming that these ships were one-half full of fuel, and assuming that the environmentalists are speaking the truth when they claim that the slightest oil spill is catastrophic for the earth, why are we still here?