NACA's Fair Tax Treatment for Consumers Resources

NACA has been working to address tax issues related to consumer law for many years. Despite our best efforts, we have yet to achieve a permanent solution to our consumer tax issue, and the problem has grown even more urgent since the passage of the 2017 Tax Cut and Jobs Act. That law eliminated consumers’ ability to deduct attorneys' fees on their tax returns—meaning that every individual consumer client may have to pay taxes on the attorneys’ fees paid to you. The threat this poses to the private enforcement of consumer protection laws simply cannot be allowed to stand.

NACA's Fair Tax Treatment for Consumers initiative will promote awareness of the problem and seek bipartisan support of legislation that would eliminate the inclusion of attorneys' fees recovered in settlements for certain consumer lawsuits from consumers’ taxable income. As part of this effort, NACA will advocate for tax laws that will treat American consumers and their legal representation fairly. NACA continues to develop materials containing immediate solutions for practitioners as well as other campaign tactics, including pursuit of a litigation strategy. This campaign plan addresses permanent solutions through legislation. You can donate to support this effort.

Available Resources

2018 Update and Memo

2017 Update and Memo

2016 Update and Memo

2015 Update and Memo

Report - Consumers Caught in Tax Law Flaw - Download

Taxation of Attorney’s Fees in Consumer Lawsuits - Download

NACA Tax Initiative Memo re Retainer Agreements - Download

2018 Webinar about Tax Initiative - Free for Members

Tax Implications of Attorney Fees in Consumer Cases Webinar - Free for Members

IRS Private Letter Ruling - 2010

IRS Private Letter Ruling - 2015

Redacted NACA Private Letter Ruling

Legislation