Law Firm (sole proprietorship)

Report a law firm sole proprietorship in Schedule A and describe what will happen to your sole proprietorship in Schedule C, Part II. Report your spouse’s sole proprietorship in Schedule A only. 

Law Firm Sole Proprietorship: Examples

For You

Schedule A

Report a sole proprietorship in Schedule A if its value was more than $1,000 at the end of the reporting period, or if the sole proprietorship produced more than $200 in income during the reporting period.

Block A: Indicate that you practice law as a sole proprietor and provide the location of your primary office (city and state). You may also include the name under which you do business; however, it is not required.

Block B: Report the value of the sole proprietorship by marking the appropriate column. The value of the sole proprietorship includes all outstanding client fees and all physical assets of the sole proprietorship. Any bank account or other financial asset in the name of the sole proprietorship needs to be reported as a separate line item.

Block C: Write “legal fees” followed by the exact amount of your income in the column labeled “Other Income” on the right side of the page.

Schedule C, Part II

Report agreements and arrangements related to your sole proprietorship in Schedule C, Part II.

Terms: Describe what will happen to your sole proprietorship during your period of government service (e.g., place into inactive status), including generally how you will handle any remaining fees owed to you (e.g., amounts of outstanding fees will be fixed before entering government service). 

Parties: List yourself or the name of your sole proprietorship. Also, provide the city and state in which you operate the business.

Date: Provide the month and year in which you entered into an agreement with any other parties. If there are no other parties, you may enter the current month and year.

Other Interests in the Sole Proprietorship

Referral Fees: If you have an arrangement to receive referral fees from another attorney after you enter government service, report the arrangement in Schedule C, Part II.

Contingency Fee Interests: If you have any interests in contingency fee cases, report these interests in Schedule A and Schedule C, Part II using the instructions provided in this guide. 

For Your Spouse

Schedule A

Report a sole proprietorship in Schedule A if its value was more than $1,000 at the end of the reporting period, or if the sole proprietorship produced more than $1,000 in income during the reporting period.

Block A: Indicate that your spouse practices law as a sole proprietor and provide the location of the primary office (city and state).

Block B: Report the value of the sole proprietorship by marking the appropriate column. The value of the sole proprietorship includes all outstanding client fees and all physical assets of the sole proprietorship. Any bank account or other financial asset in the name of the sole proprietorship needs to be reported as a separate line item.

Block C: Write “spouse’s legal fees” in the column labeled “Other Income” on the right side of the page. Do not provide the amount of income. 

Schedule C, Part II

Do not report agreements or arrangements related to your spouse’s sole proprietorship in Schedule C, Part II. 

 

This guide is not intended to provide investment advice, and you should not rely on statements in this guide when making investment decisions.