I met a new client about a month ago.  I was excited. It was the first in-person meeting I’d had for over a year due to COVID.  The client had settled a lawsuit, and the settlement income—though taxable—had been reported incorrectly on her Form 1099-MISC, so that the IRS got it into its administrative head that it was subject to self-employment income. It wasn’t. The client’s total liability would have been about $10,000, which was not insignificant to her, but to the IRS is like a grain of administrative sand.  Nonetheless, her number one concern was "Will the IRS take my house?"  My client was well educated, highly intelligent, and entirely serious. As such, laughing it off was out of the question. I received a call the other day from another client—different circumstances, same question. So, allow me to clear this up. A Bit of Background In an address to…