Tax Advice for Your Financial Recovery

Obtaining a Recovery Is Good; Keeping That Recovery Is Better

In 1959, two CPAs who had law degrees joined with a third partner to form a small law firm named McCarthy, Savransky & Greenwald. Being tax lawyers, the two CPAs naturally spent a good deal of their time providing sophisticated consulting, compliance, and planning services related to taxation. When it came to tax law, they were second to none.

Nearly six decades later, their small firm – now known as McCarthy, Lebit, Crystal & Liffman Co. LPA – has increased in size to 40-plus lawyers and expanded its scope to become a full service business and litigation firm encompassing a comprehensive range of legal practices. Yet, despite the passage of time and the evolution of the firm, one thing hasn’t changed. McCarthy Lebit continues to be known as a go-to law firm for tax-related services and we still think our tax lawyers are second to none.

Tax Law and Investment Loss

You might be thinking, “This is all well and good, but what does your firm’s tax proficiency have to do with my investment loss?” The answer is that recovery of an investment loss through litigation can give rise to some very complicated issues concerning how the recovery should be reported to the IRS. If your tax preparer is unfamiliar with the best ways to treat your recovery in order to help you pay the least tax possible, taxes might take an unnecessarily large bite out of your recovery.

That’s why our securities practice group enlists the aid of McCarthy Lebit’s tax lawyers. They make available to our clients an optional suite of tax consulting services and to provide those services for a reasonable fee. If we recover money for you as the result of a settlement or award, you can by separate agreement retain our tax team to review your unique circumstances and offer advice that potentially could save you many thousands of dollars. Our tax lawyers can analyze the characteristics of the investment products in which you incurred loss; assess the effect of income you may have received or deductions you may have taken with respect to those investments in prior years; and determine your ability, if any, to offset your gains against unrelated losses. They also can provide you and your tax preparer with a clear written description of the approach that should be followed in reporting the award or settlement on your tax returns.

Again, these available tax services are not included as part the contingent fee agreement that would govern our investment loss recovery efforts. Tax services, if desired, would require a separate retention agreement with our tax principals. The services are purely optional; you would be free to rely solely on your own tax professional or to hire another tax lawyer of your choosing. But, we at least want you to know that when you retain us to pursue recovery from your stockbroker, investment advisor, or other financial professional, our tax lawyers also will be there to help at a very reasonable cost if and when you need them.