1089: The Tax Issue

 Let us clarify this: I am assuming that I would be responsible for paying the tax on what I would receive for my case with the corruption guy.

This was my original position before finding out through that letter from the irs that gift payer not receiver is responsible for the tax. But then I read some material from the irs about the issue of whether a person should be considered as employee or contractor. It sounded like saying that the irs would look at the situation and decide based on all the outer facts rather than just how the two parties define their relationship. So, applying the same view here takes away the capability to guarantee that what I would receive can be considered as gift just because the two parties agree for it to be that. Then looking a little deeper in the matter I realized that, unlike what I said in an earlier post, whether or not I am going to be required to sign an agreement for anything I would receive, it seems like the offer I made itself as long as it was kept active constitutes a contract with an open entry point for the other party. Actually, the outer facts here seem to call for this as contract like a settlement or judgment award, and therefore taxable to the receiving party, with or without taking that offer into account.