Tax Consequences for Cancellation of Debt Income

Guest Blogger David N. Stonehill, Attorney at Law

David Stonehill  What follows is a blog post written by my colleague,David N. Stonehill, Tax
and Real Estate Attorney
.  I’m @HRMargo
on twitter. As an HR and Social Media Consultant in
his firm, I see sad stories like this every day.  Employees are drowning
in debt, particularly after the recession of 2009.  Below is a case study,
and a real story about one of Stonehill’s clients.  He has since helped
her out of this awful jam, but the fact remains clear.  Our tax code has
to change.  It is my hope that those who read this post will become as
outraged as we did.  There is a way out.  You are not alone.  As
you read this with an open heart, and mind, remember there are people out there,
good people who can and will help you.  Now, a few words from David
Stonehill. 

I have a client who is a pensioner living in rural Vermont. She’s 70
years young, lives by herself in a modest home, and drives a beat up pickup
truck. God bless her.

And she had about $40,000 of credit card debt. She hired
one of those debt consolidators, who actually did a pretty good job of
negotiating her debt in half.  They stretched the payments over a couple
years.

The problem is that this creates cancellation of debt
(“COD”) income. One creditor sent her Form 1099-C to report about
$5,000 of COD income for 2007. She didn’t know what to do with it, so she
squirreled it away. The IRS assessed her about $1,000 for failure to report the
income. She lost several nights sleep over this, because she did not have the
money to pay the assessment.

Another creditor sent her a Form 1099-C in 2008. Yet
another was received for 2009. Who knows if COD income will be reported in
2010. She has absolutely no control if and when a lender issues Form 1099-C.

The fix so far required: 1) a petition for reassessment for
2007, 2) an amendment of her 2008 tax return and 3) the
filing of long Form 1040 for 2009. I got the 2007 assessment reversed, and
avoided an assessment for 2008.

The taxation of COD income demonstrates an utter failure of
our federal tax code and treasury regulations. Without question, she can
exclude COD income, because she is broke (“insolvent” in IRS-speak).
Between social security and her pension, she doesn’t even make $20,000 a year. Yet
she cannot file a simple, short form 1040-A!

The Taxpayer Advocate has pointed out this problem to
Congress. While there is merit to taxing COD income in complicated financial transactions,
pensioners such as my client should be exempt. This is a senseless trap for the
unwary.  My client shouldn’t have to hire a tax lawyer to show the IRS why
her COD income should be excluded anyway.

For a good read, here’s a link to the Taxpayer Advocate’s
2008 report to Congress regarding the shortcomings of COD income taxation. I am
not going to hold my breath waiting for the recommended changes, but I will
work tirelessly on behalf of those who are dazed and confused by the maze of
our tax system.  For more information, contact us www.1099advisor.com  Please
feel free to reach us anytime at 877-IRS-1099.

 

Give Me All You’ve Got (I’m Not Your Expert): A Legal Nurse Consultant Speaks Out!

AliceAdams     Thanks to Guest Blogger Alice Adams, a Legal Nurse Consultant (LNC) who speaks out as to the role of the LNC in a Personal Injury Case.  Pulling no punches, she tells it like it is.  

    This article clearly and succinctly spells out for both lawyers and lay people some very salient medical issues that arise in Personal Injury cases. I know you'll enjoy her perspective.

Give Me All You’ve Got (I’m not your expert)

by Alice Adams, BA, RN, LNC

    A common misconception is that legal nurse consultants double as expert witnesses. They do not, and you do not want them to.

    As an attorney, you provide medical records to experts for their review and opinion, a process that involves your selective inclusion and omission of data.  Your expert witness is limited to a field of expertise, a narrow window that allows them to render an informed opinion.  An expert witness can make or break a case, but the number needed grows with the complexity of the case and so do the expenses involved.

    By contrast, you only need one tenacious legal nurse to work a personal injury file.

    For that reason, you need to send your LNC every scrap of data in your possession.  We are bloodhounds.  If you omit information, we will know it and we will track you down.  

    I always ask for the entire file. I will actually use very little of it by the time I have scanned once for the initial sort, scanned again to remove duplicates which I now recognize, scrutinized the remaining and highlighted what catches my eye, perusing them  one more time while looking for missing data.  

Medical records hard to read     I will sort by provider to get a sense of the continuity of care and further narrow my focus.  When I actually CaseMap the events, the picture truly comes together, revealing gaps or overlaps in care, prescribing irregularities, inconsistencies in complaints to various providers, etc.

    The most relevant data will be the hardest to find. That chicken scratch that passes for cursive writing may be at odds with the typed dictation.  The casual comment to the ER nurse or EMS may not be testimonial, but is no less relevant to the case.

    By now, I know the records well enough that I cannot stop thinking about them, even in my dreams.  Still, the pleading and  interrogatory is critical to revealing the mindset of the claimant and the temerity of the attorney.  I simply must have it.

    As the defense, it is in your best interests for a complaint to include every medical mishap that has occurred in the life of the claimant. This opens the door to investigating all past medical care.  Discrediting even one specious charge will cast doubt on those that may actually be related.  It is quite difficult to arrive at adulthood in perfect health until that unwitnessed slip and fall in the drugstore.

    As a plaintiff’s lawyer, be suspicious of the client who casts a wide net of complaints. You are equally prey to a nondisclosive claimant selectively providing you data (in much the same way that attorneys provide data to the aforementioned experts).  

    Everyone tells everyone else what they think they need to know – deciding on their own to share this thing but not that thing.  This form of picking and choosing data will come back to haunt both plaintiff and defense attorneys…particularly if the opposition has a nosy LNC on the team.

Alice M. Adams, BA, RN, LNC

www.CaseConsultant.com

5555 Peachtree Dunwoody Rd, NE #251

Atlanta, Georgia 30342

404.771.5155

TheLegalNurse@gmail.com

If you, or someone you know, has been injured in an accident, please contact me immediately at

(323) 852-1100

lowell@steigerlaw.com

Skype (with or without video): Lowell_Steiger

"Treated With the Respect That You Deserve"   

The Role of the Legal Nurse Consultant in a Personal Injury Case

Pat lewis rn     I have been very fortunate to meet a group of Legal Nurse Consultants whose passion, knowledge and expertise are of great benefit to my clients and my Personal Injury Law Practice.  As you may or may not know, I represent people who have been injured in a myriad of different ways — vehicular accidents, slip and falls, dog/animal bites or attacks, assault and battery, defective products /product liability and more.  

    In order to best represent my clients, I need to have a complete understanding of all aspects of their case including, of course, the injuries that they sustained as a result of the incident for which I'm representing them.  A complete review and analysis of their past and present (and sometimes voluminous) medical records is a major component of the case and it is often through the assistance of a Legal Nurse Consultant that this gets accomplished.

    Therefore, I'm thrilled to post the following article by Guest Blogger, Pat Lewis, a Registered Nurse and Legal Nurse Consultant

Pat Lewis Face 

Guest Blogger Pat Lewis, RN, LHRM

How Can a Legal Nurse Consultant (LNC) Help to Evaluate your Personal Injury Case?

    While it is true that an LNC may
not be well versed in mechanics or as an accident reconstructionist, their
contribution can be made by analyzing the medical records and spotting issues
otherwise overlooked. In doing so, this will help the attorney identify the
strengths and weaknesses of the case.

  Let’s take a Motor Vehicle Accident as an
example

Auto accident

Testdummy  1.   Are the injuries sustained consistent with
the type of collision described and the client’s position in the vehicle?  Restrained vs. unrestrained, driver vs.
passenger.  Each type of impact can
result in its own specific set of injuries. 
Review the ER records and EMS run sheet
for a description of the accident scene and injury complaints, as well as the
traffic collision report. Are there any facts that support or refute liability?

2.   Does the client have any preexisting
conditions or injuries similar to the current injuries or symptoms?    Review medical records and history, even
just a list of current medications can give an insight into chronic medical
conditions, look for tests or x-ray’s previously ordered as well as any
billing/insurance payments on chart.

3.  When did the client first seek
treatment?  Are they compliant with
treatment?  Any gaps in treatment?  Review the health care provider’s
documentation, i.e., Physical Therapy. 

4.  Identify crucial missing records.

5.  Identify medical experts needed.

6.  Attend Independent Medical Examinations.

Medical_records     The LNC can make a chronology and
narrative summary in accordance to the attorney preference, research literature
regarding the issues of causation and damages. Additionally, the LNC can
educate the attorney and staff regarding medical conditions, anatomy and physiology,
injuries suffered by the plaintiff, obtain or create teaching materials.  

    These are just a few of the
benefits of using an LNC in Personal Injury litigation; there may be other
roles in which they can assist the attorney by request.  The LNC can be an asset in all other types of
cases that are medically related, not solely in Medical Malpractice.

How can a Legal Nurse Consultant help your practice?

Pat Lewis, RN, LHRM 

Legal Nurse Consultant

Licensed Healthcare Risk Manager

Lewispatricia22@yahoo.com

http://www.PATLEWISRN.com

    Thank you, Pat, for your well-written and thoughtful article.

If you, or someone you know, has been injured in an accident, please contact me immediately at

(323) 852-1100

lowell@steigerlaw.com

Skype (with or without video): Lowell_Steiger

"Treated With the Respect That You Deserve"   

The Perfect Storm: Reducing Waiting Times in Emergency Departments and Diagnosing Heart Attacks by Jean M. Klingenberger, RN

Heart_attack     Thanks to Guest Blogger, Legal Nurse Consultant Jean M. Klingenberger, MBA/MHA, BSN, RN, who took the time to write the following article.  Legal Nurse Consultants (LNC) play an important role in personal injury and medical malpractice cases by reviewing and analyzing the client/patient's medical records. Due to their extensive educational background and great practical experience in hospital and medical settings, LNC's are able to review records and put together a comprehensive medical picture of the client's case.  This picture helps the lawyer deal with the medical issues and interact effectively with treating doctors, expert medical witnesses and the opinions of the medical witnesses hired by the opposing side.

The Perfect Storm: 

Reducing Waiting Times in Emergency Departments and Diagnosing Heart Attacks

by Jean M. Klingenberger, MBA/MHA, BSN, RN of Aurora Nurse Consulting, PLLC

More than 1 million people per year in the US have heart attacks.  Heart disease is the leading cause of death in both American men and women.  Heart attacks, or myocardial infarctions, cause permanent damage to the heart muscle.  “Myo” means muscle, “cardial” refers to the heart, and “infarction” means death of tissue caused by lack of blood supply.  If the heart damage is extensive, one’s health and quality of life can be severely impaired since the heart pumps blood to the rest of the body.  

The heart has a network of arteries in the heart wall that supplies blood and oxygen to the heart muscle, allowing the heart to continue to pump effectively.  Build-up of plaque and other blood products, such as clots, can severely narrow or completely clog a coronary artery, cutting off the supply of blood to that area of the heart muscle.  Without restoring the blood flow to that area, the affected heart muscle will die.  


Medical treatment for acute myocardial infarctions (AMI) is aimed at returning this flow of blood by using medications and/or medical procedures.  Time is critical in restoring this blood flow.  The American College of Cardiology and the American Heart Association joint guidelines for AMI care state that the goal for treatment is 90 minutes from time of patient presentation (to emergency department) to the medical procedure (angioplasty).  For health care organizations using “clot-busting” medication, that time is narrowed to 30 minutes from time of patient presentation to giving the clot-busting medication.  

Recent estimates are that between 2 and 8% of AMI patients are erroneously sent home from emergency departments.  How does this happen?  One probable cause is that patients may not exhibit the classic symptoms of a heart attack.  Typical symptoms of AMI include:

  • Heart.Attack Any abnormal sensation such as squeezing, pressure, burning, or pain in the center of the chest, which sometimes moves or radiates to the shoulder(s), neck, jaw, arms, or upper back;
  • Shortness of breath;
  • Sweating;
  • Palpitations (fluttering in chest);
  • Fatigue.

However, a moderate percentage of people experience non-typical or “atypical” symptoms with or without the usual ones listed above.  These atypical symptoms include:

  • Faintness or lightheadedness;
  • Nausea and vomiting;
  • Abdominal pain.

It is people who present with these atypical symptoms that pose the highest risk of not being correctly diagnosed as having an AMI.  Women under the age of 55, nonwhite persons, and those who reported shortness of breath as their main symptom were most likely to be discharged from an emergency department prior to the correct diagnosis of AMI.


Another possible cause may be emergency department sensitivity drift.  Of all of the patients coming into emergency departments complaining of chest pain, only about 15% of them are actually having an AMI.  This leads to a skepticism shown to patients presenting with chest pain, since roughly 85% are not having AMIs.  Emergency department personnel are much more likely to drop everything and run for a gunshot wound patient than for a chest pain patient, even though the consequences of responding slowly in either case could be devastating.   

Heart attack emergency 500 Emergency departments have been pressured over the past few years to improve patient satisfaction and reduce waiting time.  This has led to a tremendous amount of work being done across the country’s emergency departments to improve processes to move patients through in shorter periods of time.  When factoring the complexity of diagnosing patients with atypical symptoms and efforts to improve work flow processes within emergency departments to reduce time, the result is missing the diagnosis of AMI.  


Time gained for emergency department process improvement goals can result in some people dropping through the cracks and not receiving timely medical care to prevent losing heart muscle function.  Loss of good heart pumping leads to less blood nourishment of all the organs in the body.  Not only can this affect the way we feel physically, but can reduce our ability to perform our activities of daily living.  This loss of ability can affect our families, jobs, and emotional well-being.  Financially, the costs of impaired heart function can be substantial to pay for physicians, tests, and medications.  

How do we weather this perfect storm?  The best way is to know all of the typical and atypical symptoms of an AMI.  Know that tests such as electrocardiograms (EKGs) and blood tests should be performed at least twice and compared to each other for change, indicating possible heart damage.  This time frame should be no shorter than 4 or 5 hours.  Insist on being heard by the emergency department staff.  Patients often know when “something is not right,” and communicate that clearly.  Being informed and being heard are keys to accurate diagnosis and effective care during a heart attack.  

You can contact Ms. Klingenberger at jean@aurora-lnc.com

If you, or someone you know, has been injured in an accident, please contact me immediately at

(323) 852-1100

lowell@steigerlaw.com

Skype (with or without video): Lowell_Steiger

"Treated With the Respect That You Deserve"


Medical Billing & Legal Records A Legal Nurse Consultant’s Perspective by Guest Blogger, Susan van Ginneken, RN

Many times I have to ask Legal Nurse Consultants to review an injured client's medical records and the related bills.  I'm fascinated by the complexity of this process.  Guest Blogger, Susan van Ginneken, a Legal Nurse Consultant, was kind enough to write the following article to help illustrate what it is that she does when reviewing the billing and legal records.

Medical Billing and Legal Records by Susan van Ginneken, RN

Harried Nurse As if attorneys and nurses do not have enough to be aware of in the medical record, now someone tells us that billing codes are being misused to render higher bills than the actual services given would suggest. There was a time that if you knew the main diagnosis being treated (Principal Diagnosis), you basically knew what would be billed. Well, that does not hold true any longer. There are now “relative weights” given to various diagnosis groups, and the groups are determined by the amount of care they may require to treat. There is a book of “Diagnosis Related Groupings” or “DRGs” that outlines these, and the average course to learn how to use these codes is two weeks in length. Why is it so complex? Well, because there are “modifiers” such as “co-morbidities” and “complications” that increase the relative weight (amount of money paid) of a diagnosis group when present. Not just any secondary diagnosis will fulfill this category, so you have to know which diagnoses affect which group. There are new modifiers that apply to Acute Renal Failure, and they are not always coded correctly, particularly on emergency department charts. A notice in my latest DRG newsletter warned us to watch for inaccurate coding on those charts. 

How does this affect those of us in the legal field? Well, when you are trying to calculate damages, you cannot always go by the coding and figures offered on the bill. If those are inaccurate, Medicare or the Insurance Company may (and probably will) find the error and make the facility correct it. In fact, there is an entire group of coders and nurses working for companies in 3 areas of the country to review and find billing errors, because Medicare feels there is enough billing error in their favor to more than pay for this work! If we use billing information to help us calculate the amount of care a person required, we may well be accepting faulty material. We will then be using information that is obsolete. Better to have someone knowledgeable about the appropriate coding of a chart go through it, before attaching your final dollar figures. The billing people may also see something that everyone else missed, just by noting a code used (for example, a code for Fractured Leg with ORIF and the modifier for the co-morbidity of diabetes). If the co-morbidity was mentioned only very briefly in the chart, it is possible that it may have been over-looked. However, the presence of diabetes on the healing of that fractured leg could be big. This would make a difference in the total medical and long-term healing prospects for the client. On the other hand, if the modifier was used, yet diabetes is never mentioned in the chart, neither they nor we can use that in our work. Copying diagnoses off the face sheet of a chart is risky business. Mistakes can and do happen often.

Susan van, RN Ginneken

Legal Nurse Consultant

Nurse Life Care Planner

suetonvan7@gmail.com

Eagle Eye Record Review

www.eagleeyerecordreview.com


“I do Chart Review and Life Care Plan preparation for the care, assistive devices, and services needed after catastrophic injury or illness, as well as billing and coding consultation.”


Definitions:

Coding – the review of a chart by a specialist trained specifically for the task in order to discern the principal diagnosis on a chart and any modifiers that will affect the final relative weight of an assigned DRG category.

Complication – a condition that arises during the hospital stay that prolongs the length of stay by at least one day in approximately 75 percent of the cases.

Co-Morbidity – pre-existing condition that, because of its presence with a specific diagnosis, causes an increase in length of stay by at least one day in approximately 75 percent of cases.

Diagnosis Related Group (DRG) – one of the 579 (538 valid) classifications of diagnoses in which patients demonstrate similar resource consumption and length-of-stay patterns.

Modifier – a “CC” (complication or co-morbidity) that affects the relative weight of a DRG category.

Relative weight – an assigned weight that is intended to reflect the relative resource consumption associated with each DRG. The higher the relative weight, the greater the payment to the hospital. Relative weights are calculated by CMS and published in the final perspective payment rule.

Definitions obtained from:

Ingenix. (2007). DRG desk reference: The ultimate resource for improving DRG assignment practices. 

If you, or someone you know, has been injured in an accident, please contact Attorney Lowell Steiger immediately at

(323) 852-1100

lowell@steigerlaw.com

Skype (with or without video): Lowell_Steiger

"Treated With the Respect That You Deserve"