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Abstract: 

People get into disputes about money all the time, and often this leads to litigation. Litigators think about the fight; plaintiffs and defendants think about the size of a possible settlement. All too often, no one thinks about taxes—but as this article explains, it would be wise to keep taxes in mind.

Keywords: taxation of legal settlements, tax character of settlements, withholding tax, responsibility for tax payments, phantom income, phantom cancellation of debt, tax cost of appeals

Affiliations:  1: Independent Tax Practitioner.