We know it will be taxable (1099 MISC - Other Income) from a taxable settlement.  The issue is the 1099 is issued for 2021 but the funds are in escrow and will not be able to be accessed until a lien is removed from another lawsuit attaching the lien...which may take several months or so in court.  We are trying to see if there is a way that makes this a non taxable event (2021) until money is actually received (2022) since taxpayer has no rights to the funds in escrow right now for 2021.  But IRS will see a filed 1099 for 2021 and expect taxes due.