I received a lump sum legal payment from my former employer due to non received long term disability payments (I was in a car accident, not work related injury). This payment was arrived at with an arbitrator. My lawyer received the check for $12,500 and wrote me a check for 60% of it, keeping 40% as his legal fee. . Come January 31, 2013, I received a W2 showing $12,500 in 3rd party sick pay.

I had my taxes done (I am on disability and not earning more than my social security payments), and then they sent a new W2 showing $6,250 as wages, and $6,250 as 3rd party sick pay. Then they decided to change gears again and sent me a 1099 for $12,500.

My question is, the return was filed with the first W2, should I amend the return using the 1099? Is it correct for them to give me a W2 or is a 1099 correct? Should I do nothing and wait for the IRS to notify me if they want it changed? Lastly, am I responsible for the entire $12,500 even though the lawyer kept 40%.
Thanks very much