Employment Litigation and Claim Settlements: Maximizing Tax Benefits and Avoiding Penalties

Tax Considerations for Employers When Drafting Settlement Agreements

Note: CPE credit is not offered on this program

A live 90-minute CLE video webinar with interactive Q&A


Wednesday, October 27, 2021

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

Early Registration Discount Deadline, Friday, October 8, 2021

or call 1-800-926-7926

This CLE course will provide employment counsel and tax advisers guidance for structuring complex settlements and complying with complex tax reporting and withholding requirements applicable to employment claims. The panel will discuss best practices for employers to structure settlements, maximize tax benefits, and avoid penalties when allocating settlement proceeds. The panel will also discuss the reporting of payments and the tax implications of plaintiff requests in settlement agreements.

Description

The law governing the approval of settlement agreements and the tax treatment of settlement payments is complex and continually evolving. Employment counsel and tax advisers negotiating settlement agreements for employers must understand how structuring a settlement, drafting a contract, allocating settlement proceeds, and making payments impact the employer's eligibility to claim tax deductions for the payments and related attorneys' fees as well as its obligations to pay payroll taxes, take withholdings, or file information returns for 1099 income. Improperly characterizing a settlement payment can result in tax liability, penalties, interest, or other unforeseen consequences.

To minimize potential adverse outcomes, employment counsel should carefully consider the structure of the settlement and the language of the settlement agreement about taxable damages. Counsel should clearly state the purpose of all payments such as wages, damages, or attorneys' fees in the agreement, evaluate which payments are taxable and nontaxable, and identify the proper reporting forms for each type of claim.

Listen as our authoritative panel of employment and tax attorneys discusses the implications that employment counsel should consider and address when negotiating settlement agreements to resolve employment disputes.

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Outline

  1. Settlement payments that must be reported
  2. Tax-deductible settlement payments
  3. Settlement agreement structuring options
  4. Settlement agreement drafting strategies

Benefits

The panel will review these and other key issues:

  • What types of options exist for structuring an employment settlement?
  • What types of settlement payments in an employment dispute are taxable as wage income to the recipient?
  • What types of settlement payments and related attorneys' fees are tax-deductible by the employer?
  • What tax reporting obligations do employers have following a settlement?
  • What are some best practices for anticipating and addressing tax issues when negotiating employment dispute settlement agreements?
  • What are the tax issues in the context of class actions and collective actions?

Faculty

Fortuna, Julian
Julian A. Fortuna

Partner
Taylor English Duma

Mr. Fortuna focuses his practice on domestic and international tax planning and tax controversy matters. His industry...  |  Read More

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Early Discount (through 10/08/21)

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Early Discount (through 10/08/21)

You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

To find out which recorded format will provide the best CLE option, select your state:

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