Your role in making the IOLTA program a success in Massachusetts involves offering interest-bearing accounts to lawyers and law firms and remitting the interest accrued to the Massachusetts IOLTA Committee. The following is an overview of the steps necessary for financial institution participation.
For any additional information please contact the IOLTA Committee at
(617) 723-9093 and request a copy of the
Operations Handbook for Financial Institutions.
"IOLTA" or "Clients Funds" should appear in the title of the account, along with the attorney or firm name and address.
The TIN of the IOLTA Committee is 04-3168608 and should be used to assign all interest income. The TIN of the lawyer, law firm, or client should not be used for an IOLTA account. A completed form W-9 is included in this package to certify the TIN of the IOLTA Committee, and to certify that the IOLTA Committee is NOT subject to backup withholding. Further, neither the IRS nor the IOLTA Committee require that a 1099 be generated on IOLTA accounts. If a 1099 is generated, it should reflect the TIN of the Committee
Opinions for the Federal Reserve System, the Federal Home Loan Bank Board and the FDIC have determined that client funds may be deposited by attorneys, law firms, partnerships and professional corporations, in interest bearing accounts, including NOW, Super NOW and higher yielding accounts that meet the comparability requirements of the 2006 IOLTA Guidelines.
The IOLTA Guidelines states that financial institution must pay interest on all IOLTA funds in the account. This can be accomplished by waiving any minimum balance requirements to earn interest. Alternatively, an attorney must deposit his or her own funds to maintain the required balance.
Most financial institutions opt to waive all administrative fees and service charges on IOLTA accounts, due to the charitable nature of the program. The only fees that can be deducted from IOLTA interest are administrative fees for the reasonable costs of complying with the reporting requirements. The financial institution does NOT assess normal transaction fees and charges against the interest earned on IOLTA accounts. Such fees and charges are the responsibility of the lawyer or the law firm maintaining the account. Attorneys should be notified promptly of any withdrawals for fees so as not to effect client funds.
The IOLTA Guidelines amended by the Supreme Judicial Court on July 26, 2006 state that a financial institution must pay the same interest rates generally available to similarly situated non-IOLTA depositors at the same financial institution. Attorneys may only deposit their client funds in financial institutions that have been certified by the IOLTA Committee to be in compliance with the revised Guidelines.
The required forms to open an IOLTA account, and remit interest to the IOLTA Committee are provided on this website at the Information for Financial Institutions page. Instructions for remitting interest are also available.
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