The Illinois Attorney Registration and Disciplinary Commission (IARDC) reports that the Internal Revenue Service (IRS) has added a new regulation to Section 6050W of the Tax Code that could potentially negatively impact lawyer trust accounts as the recent regulations will take effect on January 1, 2013.
Please read the notice in its entirety posted at https://www.iardc.org/IRSCreditCardWarning.pdf
Lawyers with long firm names who may have abbreviated either with their credit card processing company or with documents filed with the IRS should take care to ensure that the firm names are an EXACT match to avoid the 28% withholding penalty that will result. Such a penalty on an attorney’s trust account may cause the balance to fall below the entrusted funds amount which could result in an unintentional misappropriation and any overdraft on an attorney’s trust account would trigger a Bar Counsel inquiry.
Please take note and check with your credit card company today to ensure that your information is accurate.
Dolores Dorsainvil is a Senior Staff Attorney with the Office of Bar Counsel.