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Question for the Money Doctors

Question submitted on Oct 24, 2013.

Question

From an accounting perspective, how do I respond and explain financial setback delta of my business to reverse a "no income 2 year look back" = "no disability income" decision as I was injured and disabled 2 years after keeping business open while had explainable set-backs for 2 years prior to my injury? Was dealing with 1st crisis of business insurers having denied my fire loss for bogus reasons, tactically, to protect their loss ratio, but nevertheless was stuck with an unpaid fire claim''s cleanup, repairs and restocking at my own expense atop 2nd crisis being hit hard by recession. I kept my employees with high w2s as a "save face" investment strategy to "appear open as usual" to stop clients from flooding to competitors during the fire. If I cannot explain this correctly I will not be able reverse the resultant 3rd crisis where I was severely injured and a decision not to pay me injury disability due to a two-year look back during the first two crisis years. The business grossed over $800K and Sched C Expenses were: W2s $380, contract labor $175K, supplies $175K with unpaid fire loss and investment decision to appear open during recession (that might have paid off had I not become injured in year 3) yet being the major culprits in netting these negative 2 year look back at tax returns? After I paid over $1K a month for disability ins for over 30 years and now the only reason I am being denied injury disability income is now these insurers are saying I had no 2 year look back income. I am basically about to be homeless if I cannot reverse this "no 2 year look back income" = "no disability income" that I am asked to explain to reverse. Grossing over $800K, to me, this was my gross income, this is what should be looked at. Had the fire claim been paid and I not chose to pay employees, I''d have been in the $500K net instead of the negative having taken those valid Sched C deductions. I was asked to explain the negative from an accounting perspective of which I am obviously having difficulty doing on my own.

Answer

Respectfully, good legal representation was important starting with the initial application for your disability benefits, due to your financial condition and self employed status. You are in the appeal process, and now is not the time to try and do this on your own. Retain a law firm that specializes in private disability insurance claims that will work with you on a contingent basis, meaning that they won't get paid unless they win the case for you. They will advise you and know how to put together the information that the insurance company has requested, in your favor. Ask this law firm to also help you apply for Social Security Disability benefits, as you indicated that you are about to be homeless. Perhaps the same law firm can help you appeal your disallowed business insurance fire claim. I hope that this helps.


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