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#1783965 - 02/07/13 09:40 PM IOLTAs and NOW accounts
Marmaduchess Offline
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Marmaduchess
Joined: Oct 2009
Posts: 169
Oregon Coast
Are IOLTAs eligible to maintain NOW accounts? Kind of confused. State government or not?

Thanks everyone!

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#1783970 - 02/07/13 09:47 PM Re: IOLTAs and NOW accounts Marmaduchess
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,684
Cape Cod
If they are state-mandated IOLTAs for which the interest is paid to a state agency or state-designated non-profit that funds legal services for indigent folks, they may have a NOW account. Otherwise, they aren't technically an IOLTA.

A law firm theoretically can have an interest-bearing demand deposit account (if you offer them), but state ethics laws or rules may not allow them to earn interest on clients' funds.
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#1783972 - 02/07/13 09:56 PM Re: IOLTAs and NOW accounts John Burnett
Marmaduchess Offline
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Marmaduchess
Joined: Oct 2009
Posts: 169
Oregon Coast
In Colorado, the interest does go to non-profits so I think we are OK to have our COLTAFs (as they are known) in NOW accounts. Thank you so much John. I can scratch that off my Reg D audit list.

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#1783989 - 02/07/13 11:00 PM Re: IOLTAs and NOW accounts Marmaduchess
cbinder63 Offline

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cbinder63
Joined: Dec 2001
Posts: 674
Colorado
COLTAF accounts are setup as interest bearing. IRS reporting is under COLTAF's Tax Id Number. The interest is remitted by the bank to COLTAF per agreement.
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