I received a question the other day about whether a business must provide a 1099-MISC form for an attorney. If the attorney is a corporation, does that make any difference? The short answer is, "No. It doesn't."
Form 1099-MISC is given to non-employees, like independent contractors and other businesses paid by your business. You must provide a 1099-MISC form to any of these individuals or businesses to whom you paid $600 or more in a tax year.
The 1099-MISC instructions are specific about providing 1099-MISC forms for attorneys, but they distinguish between two different types of payments:
1. Fees: Any law firm or attorney to whom you paid $600 or more in fees during 2011 must be given a 1099-MISC form. Enter the total paid in Box 7. It doesn't matter if this attorney is a corporation; the 1099-MISC must be provided.
2. Gross Proceeds: If you paid an attorney $600 or more in "gross proceeds" in 2011, you must also provide a 1099-MISC (Box 14). Gross proceeds are an amount an attorney receives as part of work on a settlement or sale (of a business or business assets, for example) or in the case where an attorney accepts funds on behalf of a client and takes a fee from the payment.
When are 1099-MISC forms due?
You must provide 1099-MISC forms to payees no later than January 31, for the past year's taxes. Then, you must submit all 1099-MISC forms, along with a summary transmittal form 1096, to the IRS by February 28; 1099-MISC forms for gross proceeds must be submitted by February 15.
A 1099-MISC for gross proceeds must be submitted to the IRS by February 15.