u/Kumbackkid

I had a claim going on for a few years and had two lawyers throughout the timeframe. When I got my decision the VA held 20% until they decided who to send the funds to. I made an agreement that each lawyer would get 10% and paid my second lawyer myself. The VA sent my original lawyer the full 20%.

Here’s where the issue is. He said he can send me back the overpayment amount but would want to also attach a 1099 for that to cover any possible issues. I’m afraid I will be taxed on it when I shouldn’t. The Va rep over the phone said there shouldn’t be an issue with him writing me a check and didn’t know why the 1099 was necessary. The other option is for him to send it back to the treasury department and attach a note saying where it should be sent. While I think that may be the safest bet I’m just afraid with all the government stuff something may get lost in the transit and delay the funds or have me do more paperwork. Any insight for anyone who experienced this?

Hello,

I recently received backpay for my VA retirement after a few years. I had two different lawyers through the long process and the VA sent more than was needed to my original lawyer.

VA backpay is non taxable to the veteran so this is where my issue is. The lawyer wants to send me back the overpayment amount but says his accountant insist on a 1099 to keep a trail of it. I understand him marking box 3 will cause issues when filing taxes as it will look like he paid me.

Using google it says while it will cause issues for taxes I would need to claim the amount then later clear it out and explain it was for a VA refund. It sounds like while it would be an issue I wouldn’t be on the hook for taxes if filed correctly. Can anyone confirm this?

Hello,

I recently received backpay for my VA retirement after a few years. I had two different lawyers through the long process and the VA sent more than was needed to my original lawyer.

VA backpay is non taxable to the veteran so this is where my issue is. The lawyer wants to send me back the overpayment amount but says his accountant insist on a 1099 to keep a trail of it. I understand him marking box 3 will cause issues when filing taxes as it will look like he paid me.

Using google it says while it will cause issues for taxes I would need to claim the amount then later clear it out and explain it was for a VA refund. It sounds like while it would be an issue I wouldn’t be on the hook for taxes if filed correctly. Can anyone confirm this?

I just got my claim letter and they have retro’d my effective day as of 2019. Would this make me already in the 5 year rule eligible? And how much harder would that be for them to try and reduce me in the future?

I just got my claim letter and they have retro’d my effective day as of 2019. Would this make me already in the 5 year rule eligible? And how much harder would that be for them to try and reduce me in the future.