Litigation

Structured Attorney Fees...Financial Literacy Corner

By John Darer

Forge Consulting, LLC states on its website that it "provides attorneys with fee structuring options, allowing them to take advantage of the unique opportunity to defer taxation on earned fees".Download Forge Consulting LLC - Mess.. 2-16-2009

Is there anything wrong with this statement? You bet there is!

"Earned income" is money generated by an individual's or an organization's labor, for example, wages, salaries, fees, royalties, and business profits. BNET Business Directory

"Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants"- Instructions to IRS Form 1040

Per the statutory definition found at IRC Section 32(c)(A), the term ?earned income? means?

(ii) the amount of the taxpayer?s net earnings from self-employment for the taxable year (within the meaning of section 1402(a)), but such net earnings shall be determined with regard to the deduction allowed to the taxpayer by section 164(f).

**Isn't the point of structuring attorney fees that you don't have to include the fees in gross income for the taxable year?

Considering that Forge Consulting CEO, John T. Bair made a statement under oath, to the Supreme Court of The State of New York, that he is a "Certified Specialist" who "limits" his "practice to tax issues arising out of personal injury litigation" is this supposed to inspire confidence?. Download John T. Bair Structure Broker's Affidavit Excerpt

Structured Attorney Fees is an Excellent Income Deferral Strategy For Lawyers, BUT careful planning must be done in advance should you wish to structure your attorney fees.

Full post as published by Structured Settlements 4Real on February 16, 2009 (boomark / email).