IOLTA for Financial Institutions
The Oklahoma Supreme Court created the Oklahoma IOLTA program in 1983 as a mechanism to provide greater access to the civil justice system, law-related education for school children, and other important law-related programs and projects that benefit Oklahomans. The Oklahoma Bar Foundation administers the Oklahoma Interest On Lawyers’ Trust Account (IOLTA) Program.
The Oklahoma Bar Foundation IOLTA program is mandatory for lawyers and law firms and became so in 2004 when the Oklahoma Supreme Court approved the order to make the IOLTA program mandatory.
The IOLTA program is an innovative way to supply a public good throughout the State. When an attorney or law firm receives client funds that are too small in amount or funds expected to be held for too a short a time to earn net income, these funds are placed in a pooled interest-bearing IOLTA bank account. The interest earned on these accounts is remitted by financial institutions to the Oklahoma Bar Foundation IOLTA program, which provides grants to eligible law-related charitable organizations throughout Oklahoma. The IOLTA trust account, an interest bearing account for pooled client funds which pays all interest earned to the Oklahoma Bar Foundation IOLTA program, an IRS code 501(c)(3) charitable organization.
Financial institutions throughout Oklahoma and the nation partner with attorneys to promote public good though IOLTA programs. The Oklahoma Bar Foundation thanks financial institutions for participation and cooperation with this important charitable program.
- Summarized instructions to both the attorney and the bank are contained within the IOLTA Compliance Statement Form, which is the official enrollment form. The original is to remain on file with the bank and a complete copy is to be forwarded to the Oklahoma Bar Foundation IOLTA Office.
- Please do not hesitate to contact the OBF IOLTA Office at (405) 416-7070 should you additional questions or need other information.
Current Financial Institution Guidelines for Mandatory IOLTA
- The lawyer or law firm customer must provide your institution with an “IOLTA Compliance Statement” enrollment form, instructing your institution to establish a new interest-bearing IOLTA trust account or to convert existing trust account.
- The Oklahoma Bar Foundation is a Section 501(c)(3) nonprofit charitable organization. Treasury Reg. Section 1.6049-4(c)(1) provides that an information return is not required with respect to payments made to an organization exempt from taxation. Payments that are not subject to information reporting are not subject to backup withholding, and an IRS Form 1099INT is not required. A signed Form W-9 certifying that the OBF is exempt from backup withholding will be provided upon request.
- The tax identification number of the Oklahoma Bar Foundation is: 73-0710244. Financial institutions should place IOLTA participant accounts into a non-tax or exempt status within the institution’s computer system. Financial institutions that lack the capability of overriding or preventing the creation of Forms 1099INT on exempt IOLTA accounts should show “Oklahoma Bar Foundation, IOLTA” as recipient of the interest earned by the account, and show the address and taxpayer identification number of the Oklahoma Bar Foundation on the Form 1099INT.
- The term “IOLTA” should appear in the account’s styling for deposit insurance coverage. However, the term IOLTA should not appear on other account paperwork (e.g. checks and deposit slips).
- Interest earned by an IOLTA account must be remitted directly to the OBF. Interest earned by the IOLTA participant account must not be paid to the attorney/law firm or client and should not be included in the gross income of the attorney/law firm or client. Payment of the interest to the OBF does not constitute a charitable contribution deductible by the attorney/law firm or client. See Rev. Rul. 87-2, 1987-1 CB 18.
- Interest should be remitted/reported monthly or at least quarterly. The reporting method should remain consistent for each individual lawyer/law firm IOLTA depositor within your institution.
- The report should be submitted for periods when no interest is earned, at least quarterly, so OBF is aware the account was reported and not accidentally overlooked.
- The Foundation should be notified in writing at the termination of or upon a change in any IOLTA account.
- If your financial institution is remitting for multiple lawyers/firms, please report information separately on each lawyer/firm account; however, the payment to the OBF may be in a lump sum issued on only one check. A cashier’s check is not necessary or required. Any applicable fees netted must only be applied to the account incurring the fee and must not be offset against another participant lawyer or law firm account (negative netting from other accounts is not acceptable).
- Interest earned should be remitted/reported, at least quarterly, by ACH or check (a cashier’s check is not required) made payable to The Oklahoma Bar Foundation, IOLTA. Please forward any changes relating to your financial institution name, address & contact information and account information corrections, changes and/or account status to The Oklahoma Bar Foundation, IOLTA.
- Contact the Oklahoma Bar Foundation office for electronic reporting instructions, IOLTA reporting forms and questions.
Oklahoma Bar Foundation, IOLTA
P O Box 53036
Oklahoma City OK 73152
Phone: (405) 416-7070
IOLTA Authorized Institutions as of January 1, 2023
Effective January 1, 2023 all banks participating in the IOLTA Program must have completed the following documents to be considered an Approved Institution authorized to offer IOLTA Accounts to lawyers and law firms.