An IRS rule created by the Housing Assistance Act of 2008, Rule 6050W, may impact IOLTA accounts if the account accepts credit card payments. If an attorney or law firm accepts credit card payments and processes credit card transactions throught a third party processing entity, that entity must now provide information concerning those payments and transactions to the IRS. The information is reported on Form 1099-K, and a copy must be provided to the merchant. The rule applies to all bank accounts, including IOLTA accounts. The name and tax identifying number appearing on the 1099-K must match exactly the name and number appearing on the attorney or law firm’s tax return. Beginning in 2013, a 28 percent withholding penalty on all credit card transactions is authorized if the identifying information on the 1099-K does not match exactly with what is on the merchant’s federal tax return. The rule may have ethical implications when applied to IOLTA accounts: if client funds are not immediately available due to the enforcement of the withholding penalty, the responsible attorney may face ethical violations. Attorneys and law firms should have received notice from the credit card processor if information does not match. If notice was not received, attorneys and law firms are encouraged to contact the credit card processor immediately to verify that information matches as required by Rule 6050W, and to correct any mismatches immediately. For more information on Rule 6050 as applied to attorneys and law firms, see New IRS Requirement Affects Many Attorneys.