December 2, 2024

One compliance campaign

• This campaign addresses the attempted deferral of contingent or court-awarded attorney fees by cash-method attorneys/law firms (taxpayers) who direct that such fees be paid to a third-party instead of the taxpayer.  The taxpayers do not report the fee as income when it is paid to the third party and the required Forms 1099-MISC or 1099-NEC may not be issued at the time of payment.  The taxpayer may gain access to some or all the fees by taking out a purported loan from such third party or a related party.  The goal of this campaign is to ensure taxpayer compliance and consistent treatment of similarly situated taxpayers. The campaign treatment streams include issue-based examinations and educational soft letters.
• Deferred Legal Fees
  • Practice Area: Enterprise Activities