Miller & Chevalier Employee Benefits Webinar: Federal Tax Reporting and Withholding for Employment-Related Settlement Payments
From time to time, most companies are faced with settling employment-related litigation brought by disgruntled employees or former employees. The IRS in employment tax audits routinely asks about a company's reporting and wage withholding in connection with settlements and recently issued detailed guidance to its auditors on tax rules the IRS believes are applicable to such settlements. This webinar reviewed the basic principles for proper reporting and withholding, including gross proceeds reporting to the attorneys, and reviewed common issues that arise, including discussion of areas where there continues to be uncertainty. In addition, this webinar reviewed basic tax deduction issues that arise with this type of settlement, with emphasis on addressing those issues before, rather than after, the settlement terms are worked out.