<html><head><meta http-equiv="content-type" content="text/html; charset=utf-8"></head><body dir="auto">Deric: <div><br></div><div>The request for a W-9 is not a determination of taxability, but merely a determination that the payment is reportable on a Form 1099-MISC. Give them the W-9. </div><div><br></div><div>Who will prepare the client’s return? Client should consult with CPA or tax attorney to determine whether damages payment is taxable. Generally, damages are non-taxable if characterized as ror “personal injury.” That’s why the tax attorney should be consulted at the characterization stage and when drafting a settlement agreement or proposed order. </div><div><br></div><div>“ Terminology/Definitions Types of Claims</div><div><br><div>Tort:</div><div><br></div><div> A civil wrong, not involving breach of contract, for which a remedy may be obtained;</div><div> A wrongful act committed by one person against another person or his/her property;</div><div> The breach of a legal duty imposed by law, other than by contract;</div><div> May cause or constitute, but is not necessarily, a personal injury.</div><div><br></div><div>A tort award may be received from litigation or settlement of a claim for physical injury or illness, mental pain and suffering, interference with economic relations, and/or property damage.</div><div><br></div><div>Example 1</div><div>X punches Y, thus committing the tort of battery.</div><div><br></div><div>Example 2</div><div>X sets foot on Y‟s property, thus committing the tort of trespass, but causing no personal injury.”</div><div><br></div><div><a href="https://www.irs.gov/pub/irs-utl/lawsuitesawardssettlements.pdf">https://www.irs.gov/pub/irs-utl/lawsuitesawardssettlements.pdf</a></div></div></body></html>