Section 81.112. Refunds

(a) The IOLTA Board may return income paid to the IOLTA Board under certain circumstances. If a lawyer mistakenly places Nonqualified Funds in an IOLTA Account, or if the lawyer reasonably believed that Rule 1.15 Funds were Qualified Funds, but the Rule 1.15 Funds were in fact not Qualified Funds, then the lawyer may apply for a refund of income paid to IOLTA.

(b) The following guidelines apply to applications for return of income:

(i) The lawyer must make the application in writing on firm letterhead.

(ii) The application must be accompanied by verification from the Eligible Institution in which the IOLTA Account is maintained of the income earned on the Rule 1.15 Funds for which a refund is sought. As needed for auditing purposes, the IOLTA Board may request additional documentation.

(iii) The application must be received by the IOLTA Board within six months after the Rule 1.15 Funds have been disbursed from the IOLTA Account.

(iv) The refund will be remitted to the lawyer for his/her distribution to the Third Party Owner. The IOLTA Board will issue an IRS (Internal Revenue Service) form 1099 to the lawyer who, in turn, is responsible for issuing an IRS form 1099 to the Third Party Owner.

(v) If the Eligible Institution has imposed a service charge with respect to the deposit, only the net amount of income paid to the IOLTA Board (reduced by applicable service charges) will be refunded.

(vi) The IOLTA Board may deduct a processing charge from the refund.