Is it necessary to prepare IRS Form 1099 for pooled IOLTA accounts?
A. No. Since MLSC is a 501(c)(3) charitable organization, the IRS has advised that a financial institution does not need to report interest income generated by a pooled IOLTA account. In fact, in order to minimize administrative problems, a Form 1099 should not be prepared on these accounts. If for some reason it is necessary to prepare the form, MLSC should be shown as the recipient of the interest (Tax I.D. number 521266744), and the form should be mailed directly to MLSC. The attorney or law firm’s Tax I.D. number should never be used.
