New rules for IRS 1099
New rules relating to the issuance of 1099 forms are in place that impact even funds in one’s IOLTA account. If you have oversight and management of the funds such as selecting the expert witnesses or investigators in a personal injury matter, you may have sufficient dominance to be required to issue a 1099.
See Priv. Ltr. Rul 97-44-02 (1997) and 91-02-013. See also Rev Rul 93-70, 1993-2 CD 294.
The threshold amount if $600. Beyond that, consider the consequences of filing/not filing. And if you’re a co-recipient of a settlement draft with your client where a portion of the draft is for attorney’s fees, you will still have to report and/or attach an explanation to your tax return.
Moral of the story: These laws are complex. Consult your tax adviser.Tags: Cash & Finances, cash management, Management
Categorized in: Management