About the Course
Introduction
This CLE/CPE course will provide tax professionals guidance on the tax treatment of legal settlements and judgments under current tax law. The panel will discuss IRC 162(f) and 6050X and other applicable regulations, reporting requirements, and avoiding fines, penalties, and other amounts. The panel will also discuss strategies to minimize adverse tax liability and offer guidance on settlement agreements and payments.
Description
IRC Section 162(f) and 6050X provide the framework for the deduction of certain fines, penalties, and other amounts stemming from settlements and judgments. Tax professionals must be aware of the implications, reporting requirements, exceptions, and other nuances of these regulations.
The 2017 tax reform prohibits the deduction of any amounts paid or incurred to, or at the direction of, a government, governmental entity, or certain nongovernmental entities in response to a violation of law or potential violation of law, with few exceptions. Since then, the regulations have undergone several changes regarding their application to governmental authorities while also providing taxpayers with guidance in negotiating and drafting settlement agreements. This forces taxpayers and their counsel to be creative in their arguments when claiming such deductions. The regulations also address Section 6050X, which imposes reporting obligations on certain governmental authorities.
Recently, in Eiler v. Commissioner, 167 T.C. No. 3 (July 14, 2026), the Tax Court rejected the plaintiff's argument that a deduction for attorney's fees should be allowed so long as they meet the requirements of Section 62(a)(20), which makes such deductions permissible if they are in connection with any action involving a claim of unlawful discrimination. This Tax Court confirmed the taxation of settlement proceeds, including amounts paid as attorney's fees, unless a specific deduction applies.
Listen as our panel discusses the tax treatment of settlements and judgments, outlines the implications of IRC 162(f) and 6050X regulations, and offers strategies for negotiating and drafting settlement agreements in light of these regulations.
Presented By
Mr. Wood handles a wide range of tax planning and tax controversy matters. He also serves as an expert witness on tax issues in legal disputes. Mr. Wood is best known for his expertise advising plaintiffs, defendants, and lawyers on the tax treatment of legal settlements and judgments. He authored the leading book on this topic, Taxation of Damage Awards & Settlement Payments (5th Ed 2021), as well as the Bloomberg Tax Management Portfolio, Tax Aspects of Settlements and Judgments (522). Mr. Wood is listed among the elite tax lawyers in the United States by many best lawyers periodicals. He writes regular columns in Tax Notes, Forbes and other publications, and comments on tax matters in the media.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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CPE credit is not available on recordings.
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BARBRI is a NASBA CPE sponsor and this 90-minute webinar is accredited for 1.5 CPE credits.
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BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
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Date + Time
- event
Thursday, December 10, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Overview of the tax treatment of settlements and judgments
II. Recent case rulings
III. IRC 162(f) and 6050X regulations
A. Requirements
B. Exceptions
C. Reporting
IV. Key considerations in negotiating settlement agreements
The panel will review these and other key issues:
- What are the applicable rules regarding the tax treatment of settlements and judgments?
- What impact do IRC 162(f) and the 6050X regulations have?
- What are the requirements and exceptions under current tax law?
- What are the reporting and tax compliance challenges?
- What are the key considerations for negotiating and drafting settlement agreements
Learning Objectives
After completing this course, you will be able to:
- Recognize key issues concerning the tax treatment of settlements and judgments
- Understand the requirements and application of IRC 162(f) and 6050X regulations
- Ascertain tax planning methods to assist taxpayers in paying or receiving cash from settlements or judgments
- Understand the reporting requirements for taxpayers and government authorities
- Field of Study: Taxes
- Level of Knowledge: Intermediate
- Advance Preparation: None
- Teaching Method: Seminar/Lecture
- Delivery Method: Group-Internet (via computer)
- Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
- Prerequisite:
Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules for domestic and multinational businesses; supervisory authority over other preparers/accountants. Knowledge and understanding of filing requirements and penalties for non-compliance; familiarity with IRS processes for penalty abatement requests and settlement agreements.
BARBRI, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.
BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).
BARBRI CE webinars-powered by Barbri-are backed by our 100% unconditional money-back guarantee: If you are not satisfied with any of our products, simply let us know and get a full refund. Contact us at 1-800-926-7926 .
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