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Tax Reporting of Company-Paid Legal Fees for Former Officers
October 2, 2025
Q. Our company is paying the legal fees of former officers who are involved in ongoing litigation related to their employment with the company. The payments are being made directly to their outside counsel. What is the proper tax reporting for these payments? Specifically, should the payments to outside counsel be reported on Forms 1099-NEC or 1099-MISC? Do these payments also need to be reported to the former officers; if so, which form should we use?
A.
(Answered by IOFM's third party tax…
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