There have been important revisions to the credit card transactions reporting law that could negatively impact Interest on Lawyer Trust Accounts (IOLTA). Credit card processing companies are required to verify an EXACT match of merchants’ federal tax identification number and their legal name with those on file with the IRS. Lawyers who accept credit cards are considered merchants. If there is not an exact match, beginning January 2013, the IRS will impose a 28% withholding penalty on credit card transactions, including those that lawyers direct to their IOLTA account. Ethical issues could be raised if client funds in the IOLTA are withheld due to the lawyer’s failure to act. Get more information here.
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