Attorneys may be approached by representatives of factoring companies seeking to offer cash for the the rights to receive the structured attorney fee payments. It’s a given that if sold/transferred, the payments will be discounted, but it’s possible that some factoring companies are implying that there may be some tax benefit because the factoring company will not withold tax or issue a FORM 1099. This is utter rubbish!
IRC 61(a) Except as otherwise provided in this subtitle, gross income means all income from whatever source derived
Keep in mind that factoring requires no professional licensing and be guided accordingly.
Leave a Reply