NACA aims to obtain fair tax treatment for consumers when they win or settle consumer cases.
Consumers are being taxed on attorneys’ fees that are awarded in these cases. The fees go directly to the consumers’ attorneys, and the consumers’ attorneys pay taxes on these funds. Consumers should not pay taxes on funds that they do not receive. And the IRS should not receive double taxes – from consumers and their attorneys – on the same set of funds. The double taxation problem has grown more urgent since the passage of the Tax Cuts and Jobs Act of 2017 which suspended a crucial deduction for consumers.
NACA supports legislation that would allow consumers to exclude recovered legal fees from their taxable income and is promoting awareness of this issue among lawmakers. You can get involved by contacting your legislators about the End Double Taxation of Successful Consumer Claims Act.
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Groups Send Letter to Senate in Support of Consumer Tax Bill