There are several ways in which having failed to file your tax returns can hurt your personal injury claim. If you are seeking lost income as part of your damages, you must prove your prior income. Typically, tax returns are used for this purpose. Even if you are not seeking lost income, unpaid taxes can eat up any compensation you win before you receive it. If you were employed, rather than an independent contractor, your taxes may already be fully paid and you may have an alternate way to prove your lost income. Each situation is unique. Be upfront with your personal injury attorney during your initial consultation so she can give you accurate advice on how to handle yours.
Proving Lost Income
Tax returns are the most common way of proving lost income. They are essential for people who are self-employed, work short-term jobs, earn a substantial amount in tips, and many others. If you are a regular employee, you may be able to get away with using your W2’s instead.
Do You Owe Taxes?
If you haven’t paid taxes, and owe them, you could have some serious problems. It’s possible that seeking compensation for lost income could set off a chain of events that will end in prosecution for you. Also, the IRS can take action that allows them to take your settlement money before it is ever paid to you.
Damaging Your Case with the Jury
If you haven’t paid your taxes, it can hurt your credibility with the jury and cause them to lose sympathy for you. If you simply haven’t filed, but your taxes were covered by withholding, that is more easily explained.
Unfiled and unpaid taxes can create problems in a personal injury claim but may not mean the death of your case. To learn more about how failure to file or pay taxes will affect your claim, what you can do about it, and how best to proceed, in Georgia, please call Robbins Law, PC, at 800-772-5555 or contact us online today and schedule your free consultation.