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Who pays taxes on the interest earned on IOLTA accounts?

April 26, 2017accounts earned IOLTA pays taxes

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Who pays taxes on the interest earned on IOLTA accounts?

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A. No one pays any taxes on this money. The IRS has ruled that the interest generated on IOLTA accounts is not taxable to the lawyer, the law firm or the client. Participating banks are instructed to report the income to the IRS as received by the Foundation, a nonprofit corporation.