Thursday, March 17, 2011

Tort Firm Misclassifies Lawyers, Owes $158K Tax Bill

The ABA Journal has an article on how NOT to structure a law firm with regards to attempting to skirt around tax law by labeling all of your "incubating attorneys" as "independent contractors." The IRS doesn't take kindly to such tactics and the Court of Appeals for the Fifth Circuit agreed finding that the attorneys to whom Donald Cave provided office space and referred cases that were handled under his law firm name were associates of Donald Cave's law firm rather than independent contractors, and that the firm owed $158K in taxes.

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