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Reporting legal fees to both attorney and claimant
May 2, 2024
Q. We sometimes have settlement agreements where we are directed to reimburse a claimant's legal fees and the check is payable to the attorney only. We know that we are required to issue a 1099-MISC to the attorney with the amount reported in Box 10. But, if the attorney retains the funds and it is not later disbursed to the claimant, is this still considered taxable income to the claimant? Do we still have to issue a 1099-MISC to the claimant even if they did not receive any…
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