According to the U.S. Chamber-backed Legal NewsLine, the litigation lobby is quietly preparing to push through a $1.6 billion (with a “b”) tax break that would let contingent-fee lawyers deduct expenses as made, rather than in the year of settling a suit. American Association for Justice lobbyist Linda Lipsen says Sens. Harry Reid and Max Baucus and Reps. Nancy Pelosi and Charles Rangel are among those on board, as well as “some Republicans”, but “the problem is there is not a tax vehicle yet,” — “You cannot have a stand alone bill to help lawyers … so we have to tuck it into something.” [cross-posted, and slightly adapted, from Point of Law; updates and additional links there]
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Congressional democrats championing legislation for lawyers.
Gee. Who’d have thunk it!
I guess the campaign contributions from lawyers to congress must be pretty rich this year.
If passed, what would happen to those deductions if the case is never settled?
“You cannot have a stand alone bill to help lawyers … so we have to tuck it into something.”
Translation: “This atrocity against justice has to be completely hidden from any oversight or media attention, secreted at 3AM into one of our massive 2000 page legislations, unread by any Congressman or Senator, and voted into law at 10 AM the next day.”
locomotivebreath1901,
If the case isn’t settled then there’s a provision for nomination to a Cabinet post.
Reading the Volokh post on this I am not sure this is unreasonable. Sounds like an accounting shift rather than anything real.
Since other businesses get to deduct expenses when they are incurred, I don’t see the problem.
Of course this can not be applied to medicine where physicians receive no tax breaks for government enforced uncompensated care. We can not deduct expenses, time or the increased liability insurance that we have to carry.
This is a non-story. All this bill would do is allow contingent-fee lawyers to deduct expenses the same year in which they are incurred (which is the norm in the business world), rather than in the year
in which the case to which those expenses relate is resolved. What is wrong with that? More specifically, why is this an “atrocity”?