Legal Question in Civil Litigation in California

Giving Away Social Security Number

I am a plaintiff in pro per. I just reached a settlement with two defendants. One of them is represented by an insurance attorney and the other is in pro per.

They both asked me to give them my social security number so that they could claim the settlement amount that they will be giving me. I did so. I appreciate clarification on the following questions:

Did these parties really needed my SS# in order to give me the recovery amount?

Can they misuse my SS# and if so, what should I do to protect myself?

The recovery covers my actual damages only. Do I need to declare the recovery amount to IRS and pay taxes out of the recovery amount?

Thank you very much!


Asked on 10/20/08, 6:16 pm

1 Answer from Attorneys
Edward Hoffman Law Offices of Edward A. Hoffman

Re: Giving Away Social Security Number

Such a request is standard procedure. The defendants want to report the settlement payment to the IRS, much an an employer or contractor will want to report the salaries and/or fees it pays to its workers. The IRS uses social security numbers to identify individual taxpayers, lest it conflate two or more people who have similar names.

While it is possible that they will "misuse" this information, doing so would likely be illegal. They probably don't want to misuse the SSN and will probably hold it in confidence. Hopefully, even if they want to do otherwise, the legal consequences will keep them in line.

Some settlements qualify as taxable income and some don't. Many are taxable in part. The extent to which yours may be taxable will depend upon many facts about your case. You should discuss your settlement with a tax professional. You really should have done this before agreeing to an amount, but there may still be time to benefit from such advice.

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Answered on 10/20/08, 6:44 pm


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