CLE Programs

When the Litigation is Over: Taxation of Damages and Release of the Medicare Lien

*Sponsored by the Civil Litigation and Taxation Law Section Councils

There is far more to litigation than winning the case. Your client may be ecstatic with the result you obtained — until the IRS comes calling. Or, you may represent the defendant, who can significantly reduce his costs if the payment can be structured as deductible. Having an idea of the tax results for both your client and the defendant will make you far more effective in negotiating settlements, because you will better understand what the payments mean to each side.

Taxation is not the only issue. If your client is elderly or disabled, personal injury settlements and judgments may require satisfaction of Medicare’s lien interest. If Medicare’s lien interest is not protected, the Medicare recipient, plaintiff’s counsel and the defendant/insurer issuing payment may all be liable to satisfy the Medicare lien. Knowing how properly to handle Medicare liens, will be critical to an effective representation of elderly and disabled clients. Topics include:

  • Taxation of damages for personal injuries;
  • What does and does not constitute personal injury within the meaning of the Internal Revenue Code;
  • Taxation of damages in several non-personal injury contexts;
  • Taxation of punitive damages in both the personal injury and non-personal injury contexts;
  • Possible ways to structure settlement agreements to trigger beneficial tax provisions;
  • How to confirm the existence of a Medicare lien and the timeline that will follow; and
  • How to negotiate and satisfy a Medicare lien, and the penalties for failing to do so.

If the attorney does not know the tax results of a potential settlement, he may not provide the client with effective representation, since he is hampered in his ability to negotiate the best deal for the client. In addition, the client may be more likely to sue the lawyer if he settles without being advised of the economic results of the settlement as the result of likely tax exposure. Last, Medicare may sue the Medicare recipient, plaintiff’s counsel and the defendant/insurer issuing payment of the settlement or judgment if Medicare’s lien interest is not properly preserved.

If you are a personal injury attorney or litigator whose cases involve civil damages, don’t miss this program.

 

Faculty:

Joan B. Di Cola, Esq., program chair

Michael B. Bogdanow, Esq.
Meehan, Boyle, Black & Bogdanow, Boston

Michael H. Hayden, Esq.
Morrison Mahoney LLP, Boston

Sponsoring Sections:

Civil Litigation Section

Taxation Section

The Sole Practitioner and Small Firm Section

Related Practice Areas: General Civil Law, Tax Law
Seminar with On Demand On Demand
Date:Thursday, June 23, 2011
Time:4:00 PM - 7:00 PM
Location:Massachusetts Bar Association
20 West St
Boston, MA, 02111
CODE: TAC11
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Related Products

On Demand: When the Litigation is Over: Taxation of Damages
ePublication: When the Litigation is Over: Taxation of Damages
Publication: When the Litigation is Over: Taxation of Damages
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