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IRS Balance Removal

An individual in Boca Raton, FL inherited a large sum from a friend who passed away that she was a caregiver for. The individual hired an attorney to mediate a resolution for the inheritance that was being contested by the friend’s family. At the end of the court dispute, our client received around $400K and the Florida Attorney that handled the disbursement of funds incorrectly issued a 1099-Misc Form to the IRS causing a significant amount of liability due- over $200K. Our office immediately recognized that this was done in error and the Attorney did not understand that an inheritance of cash is a nontaxable event and instead caused a taxable event of over $200K through malpractice. The Enrolled Agent provided case law and argued to the attorney that they had an obligation to issue a corrected 1099-Misc to the IRS reflecting the $0.00 inheritance and worked with the assigned Revenue Officer to resolve the case and remove the assessment and the tax lien, resulting in a $0.00 balance due and a savings of $206,087.85.

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