Ezel / IRS Rulings / 201106015

CCA 201106015: Municipal attorneys remain employees of their law firm

Number
201106015
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Attorneys
Topics
Employment taxes
Code sections
§ 3121
Ruling dated
January 12, 2011
Publicly released
February 11, 2011
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2011
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advice addressed a law firm that assigned one of its attorneys to provide legal services to small municipalities. The firm invoiced and was paid by the municipality, while the attorney was paid by the firm. The advice concluded that the attorney was not an employee of the municipality for purposes of the services provided there.

Ruling snapshot

  • Question: Is an attorney supplied by a law firm to a small municipality an employee of the municipality or of the law firm?
  • Outcome: Advice given, the attorney was not an employee of the municipality.
  • Key authorities: IRC § 3121.

Full text (IRS public release)

ID: CCA_2011011212194270 Number: 201106015
Release Date: 2/11/2011
Office: ----------------------------
UILC: 3121.04-03

From: ----------------------
Sent: Wednesday, January 12, 2011 12:19:43 PM
To: -------------------------
Cc: --------------------------------------------------
Subject: Law firms whose attorneys perform services as city attorneys and judges for small municipalities

As I understand the facts:

The law firm provides one of its attorneys to perform legal services for a municipality. It's usually the same attorney every time. The firm sends an invoice to the municipality, and the municipality pays the firm. The municipality does not issue a Form 1099. The attorney is paid by the law firm. Small municipalities essentially contract out for these services when they can't afford their own full time city attorney.

The question is whether the IRS should assert that the attorney is an employee of the municipality, rather than an employee (or partner) of the law firm for purposes of the services provided to the municipality.

My answer is no. The attorney is not an employee of the municipality.

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