1099 Attorney and Settlement Reporting for AP and Tax Professionals
Author: Steven D. Mercatante
| CPE Credit: |
2 hours for CPAs
2 hours Federal Tax Related for EAs and OTRPs
2 hours Federal Tax Law for CTEC |
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2026 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
The IRS is paying close attention to third-party payers, including small and mid-size businesses, and how they report payments made to attorneys and claimants on Forms 1099-NEC and 1099-MISC.
During this course we will explore:
- How to comply with IRS rules when reporting attorney fees and other third-party payments
- What to do when you must 1099 report settlement payments to claimants
- Documentation requirements and instructions for Forms 1099-NEC and 1099-MISC
Plus, you will learn what your organization needs to be doing now to meet reporting deadlines and ensure compliance. In this course, industry expert and corporate tax attorney Steven D. Mercatante Esq. takes a look at some of the more common problems related to documenting, validating, and reporting 1099 settlement/attorney payments.
Publication Date: November 2023
Topics Covered
- Discover Form 1099-NEC and 1099-MISC reporting requirements for legal settlements
- Address reporting issues cropping up with reporting settlement payments involving back-pay, liens, garnishments, personal physical injuries, emotional distress, three or more parties involved in the payment, punitive damages, medical testimony, backup withholding, medical reimbursements, property issues, and more
- A detailed explanation breaking down how to handle the non-fixed and determinable reporting exception for settlement payments
- Which payments are taxable and reportable and which are considered 1099 reporting exceptions
- Handling settlement agreements that may involve W-2 or 1099-INT reporting
- Discover whether attorney fees are reported in box one of the 1099-NEC or box ten of the 1099-MISC
- When an LLC is not reportable as a corporation and when it is as a company
- Discover how to report law firms and partnerships that are single versus multi-member LLCs
- Reporting issues cropping up with incorporated legal service providers
Learning Objectives
- Recognize how to comply with IRS rules when reporting attorney fees and other third-party payments
- Identify what to do when you must 1099 report settlement payments to claimants
- Describe documentation requirements and instructions for Forms 1099-NEC and 1099-MISC
- Identify on which Form 1099 payments made to the claimant are generally reported
- Identify the section of the law that authorizes you to backup withhold and report accordingly on the Form 1099-MISC or 1099-NEC if the payee's name and TIN is not provided
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
