Attorneys hold a special place in the heart of the IRS, that is, if the IRS really has a heart. We know this is true because the only time 1099s are required for payment of services to a corporation is when that corporation is a Law Firm. The IRS knows something or at least they think they do about how attorneys do business and at the very least they have provided some extra check on the profession. They have even published a special “Attorneys Audit Technique Guide” just to make sure that auditors know where to look when auditing a law firm.
Because the IRS knows so much about you, good record keeping is a must. Add to this the complicated Bar Association rules for maintaining trust records, tracking of advanced costs, tracking fees due to and from co-counsel and complex tax reporting including the reporting of tax payments of $10,000 or more and taxability of “Lawsuits, Awards, and Settlements”, you need to be a tax expert in addition to an attorney.
Our firm understands the complex accounting and tax requirements of attorneys and law offices. We have helped attorneys solve problems with unpaid taxes and represented them in IRS audits but most importantly we have helped them avoid tax problems and actions that would increase their visibility on the IRS radar.