Academy of Chiropractic Personal Injury & Primary Spine Care Program

Quickie Consult 11

From the Desk of Dr. Mark Studin
Academy of Chiropractic
Preamble: Many of the issues I bring to you are very small, yet each issue is just that, an issue. If you take care of the small issues, then you will be able to build and more importantly, focus on the bigger issues...a larger practice and more family time.

Liens Not Paid & Tax Deductions


In response to Quickie Consult #10 where I discuss liens that are not paid and being able to deduct the loss on your income tax, some of you wrote that you didn’t think that it could be deducted in your state. I can’t help you locally, but the IRS has a provision to protect against specific bad debt and according to a tax expert in the field of medicine, this qualifies as a deduction. Meaning, if you have a documented case where the lawyer does not pay your lien, it can be a deduction.
 
IRS Regulation 1.166-5[b}
IRS Regulation 1.166-6
 
These are the sections of the IRS code that allow you to take the deductions. Pass them to your accountant.
 
Reg.1.166-5[b} and Reg.1.166-6 only work if this is a bad business debt that cannot be collected.
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