Hi,
Thanks for responding to my query.
I was an employee of the business, not a director, or a share holder.
I don't think the business filed anything to IRS. It basically went belly up and left us to fend us for ourselves in all legal matters. I therefore had no option but to pay lawyers from personal funds and negotiated settlements with personal funds. Finally, the insurance agreed to pay a small lumpsum to cover for past and any future expenses.
If I can prove that I spent the money paying legal fees and settling with creditors of my company (I have the signed settlement agreements), do I still need to pay taxes on those? I know that IRS will make me pay taxes on the amount I have to cover future expenses.
Thanks again for your time.
