Not sure if this is an appropriate venue for this question but figured others here might end up with a similar issue at some point.
We sold a (US) business 3 years ago (in 2006 to a US acquirer) and recently were paid an earnout that was based on the performance of the company. We received no documentation from the acquirer and were told that we would not be receiving any documentation. The money was wired directly into our accounts and we did not give any Tax ID information to the acquirer (we were not asked).
1) What is the legality of reporting this on taxes? I assume we would need to do so but the lack of documentation has me questioning it. If it is not reported I can stomach paying back taxes later if indeed we're required to pay taxes on this (the amount was about $175K).
2) If it does need to be reported (as I suspect it does) my understanding is that it would be a long-term capital gain (based on some conversations with others who also received earnouts). However, I'm not sure how I am supposed to know that without documentation.
Please let me know if you have dealt with a situation like this before. I am planning to engage legal counsel if necessary but figured I would ask here before running up the legal tab.