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.
2 Answers from Attorneys
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.
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...