Car damaged by a city vehicle? Carefully navigate the compensation process

DENVER -- You don't want to experience a collision with Denver city vehicles like buses and recycling trucks, but if you do, it's important to know the process of filing a claim.

Charlene Goldman says a recycling truck collided with the back end of her Toyota Prius, which was being driven by her son.

"The truck cut the turn too short and clipped the car then ripped off the bumper," Goldman said.

After a police report was completed, Goldman filed a claim with the city. She tells FOX31 she will need nearly $4,000 to repair the damage and pay for a rental car while her car is out of commission.

The city is asking her to fill out a W-9 tax form in order to receive compensation, something Goldman says she’s wary of due to the possible tax consequences when she files her return next year.

"It didn't seem fair and I didn't understand what was behind it," Goldman said.

The FOX31 Problem Solvers asked the city attorney to explain. A spokesperson says if you file a claim, the city will ask for a social security number or ask you to fill out a W-9 form depending on the details of your case in order to confirm your identity to ensure the payout is sent to the right person. The city emphasizes that not every claim will end up as taxable income with the IRS.

"It is up to the individual to work with their tax attorney or accountant to determine if the payment is taxable," the spokesperson said.

Tax specialist Chadwick Elliot of the Denver Tax Group tells the Problem Solvers that city governments and businesses are required by law to report payouts they make.

"At the end of the day, it always comes down to the tax code," Elliot said. He explains that anyone receiving payment or filling out a W-9 form "should make sure to ask the right questions, especially if you are an individual and not a business."

Elliot added that when "someone is paid in a capacity where they're not an employee, the IRS wants you to report that information -- fill out a W-9. Then, at the end of the year, that person usually gets what [is] called a 1099 (form) and with that 1099 they'll report that information on their taxes."

The city of Denver tells FOX31 that specialists are available to answer questions. For more information, visit the city's website.

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