Taxpayer received about $1500 in 2010 as a settlement for a "Countrywide Foreclosure Relief Program Settlement Fund." He received a 1099-MISC with the $1500 as "Other Income" in Box 3 (nothing in any other box). The 2010 tax preparer didn't count as income but IRS has contacted taxpayer about unreported income.
I have researched online and found that the taxpayer was in foreclosure when settlement was reached in October 2008. Taxpayer's payment was for "relocation assistance", not a mortgage modification.
THE FAQs of the settlement online say to consult your tax preparer concerning taxability! The taxpayer has no records of any paperwork about the suit or the payment, only vaguely remembers receiving and cashing the check.
I can't see any reason why it isn't taxable. My inclination is that it is Line 21 income not subject to SE. Am I missing something?
Thanks.
I have researched online and found that the taxpayer was in foreclosure when settlement was reached in October 2008. Taxpayer's payment was for "relocation assistance", not a mortgage modification.
THE FAQs of the settlement online say to consult your tax preparer concerning taxability! The taxpayer has no records of any paperwork about the suit or the payment, only vaguely remembers receiving and cashing the check.
I can't see any reason why it isn't taxable. My inclination is that it is Line 21 income not subject to SE. Am I missing something?
Thanks.
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