Legal Question in Business Law in California

Providing SS # to receive settlement/payment

I owned 5% of a business. The two other business owners had a 65/30 split. They eventually took each other to court, and I subsequently signed over my ownership rights in exchange for a monetary payout once the two other owners settled their case with each other. I received an email last night from the lead attorney involved in the case stating that the case was finally resolved, and that I needed to provide her with my social security number in order to receive my payout from the settlement. There is no indication in the contract that I signed that I would have to provide my ss# to receive any payment, nor is there any indication that the payout would come from the attorney instead of the individual. In light of this, I'm wondering if I have to provide the attorney with my SS# in order to receive my money?


Asked on 11/21/05, 10:49 am

2 Answers from Attorneys
Timothy J. Walton Internet Attorney

Re: Providing SS # to receive settlement/payment

I respectfully disagree with Mr. Koenen. I am not aware of any rule of law that requires that a party settling a dispute must surrender a tax ID number.

The party paying the settlement amount does have a duty to report the payment to the IRS, with or without a tax ID number corresponding to the recipient of the funds.

Read more
Answered on 11/21/05, 7:08 pm
Ken Koenen Koenen & Tokunaga, P.C.

Re: Providing SS # to receive settlement/payment

Usually, the attorney receives the monetary settlement in his trust account. He is required to report any payments to you to IRS. Whether or not this will affect you tax-wise is unclear, depending on whether you are receiving reimbursement of capital contribution or a gain in the value of the business.

Either way, you will need to provide some tax ID# to the attorney.

Read more
Answered on 11/21/05, 11:15 am


Related Questions & Answers

More Business Law questions and answers in California