"The Trial Bar's Tax Break"

December 05, 2017

The Wall Street Journal Editorial Board urged the House-Senate tax conference committee to reinstate a provision that would strip plaintiffs’ attorneys of a “contingency-fee carve-out” on taxes.

In 1995, the Ninth Circuit “broke with precedent” by allowing attorneys to deduct litigation expenses from their taxes, but only in states under that circuit. Plaintiffs’ attorneys, the editorial board says, “are more likely to file dubious lawsuits—and drag out cases—when they can immediately deduct expenses.” 

The Senate version originally had this provision before it was removed by Sen. Lindsey Graham (R-SC). The House version, however, still includes the language. If it is adopted in the final bill, the editorial board said it could generate $500 million in tax revenue over the next ten years while also discouraging frivolous lawsuit filings.

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