New (Final!) Form 1099 Reporting Regs: Attorneys' Fee Regs in Drag?

Posted: 11 Oct 2002

See all articles by Robert W. Wood

Robert W. Wood

Wood LLP; Wood LLP

Jonathan R. Flora

Lindquist & Vennum, PLLP

Abstract

This article arises out of Wood's practice of advising litigants concerning the tax treatment of payments and recoveries.

In this article, Wood and Flora give a brief history of attorney payment reporting. They note the 1997 genesis of the attorney reporting rules, and the status of several sets of proposed regulations. They then turn to the recently released final middleman regulations, which address various payments for or on behalf of others (such as escrow agents). They note that these middleman regulations now explicitly also apply to attorneys' fees, something that is bound to surprise many who have closely watched the more explicitly denominated attorney payment regulations promulgated (still in proposed form) under section 6045(f).

Apart from the surprise application of the middleman regulations to attorneys, Wood and Flora also argue that the less than automatic standards that must be applied under the middleman regulations will be confusing. For example, to determine if reporting is required, a payor must now assess whether it is performing management and oversight functions with respect to the payment that rise to a certain level.

Ultimately, the authors conclude that the latest spate of attorney reporting regulations will cause significant confusion and is unlikely to make the already muddled tax treatment of attorneys' fees any clearer.

Suggested Citation

Wood, Robert W. and Flora, Jonathan R., New (Final!) Form 1099 Reporting Regs: Attorneys' Fee Regs in Drag?. Available at SSRN: https://ssrn.com/abstract=339440

Robert W. Wood (Contact Author)

Wood LLP ( email )

333 Sacramento Street
San Francisco, CA 94111
United States
415-834-1800 (Phone)
415-834-1888 (Fax)

HOME PAGE: http://www.WoodLLP.com

Wood LLP ( email )

333 Sacramento Street
San Francisco, CA 94111
United States
415-834-1800 (Phone)
415-834-1888 (Fax)

HOME PAGE: http://www.WoodLLP.com

Jonathan R. Flora

Lindquist & Vennum, PLLP ( email )

4200 IDS Center
80 South 8th Street
Minneapolis, MN 55402
United States
(612) 371-3217 (Phone)
(612) 371-3207 (Fax)

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