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End Double Taxation of Successful Consumer Claims Act
To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction for attorney fees and costs in connection with consumer claim awards.
Summary
This bill amends the Internal Revenue Code to allow taxpayers an above-the-line deduction for attorney fees and costs incurred in successful consumer protection claims. The deduction would apply to attorney fees paid in connection with judgments or settlements related to violations of federal consumer protection laws, including the Truth in Lending Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, Consumer Product Safety Act, military lending protections, and state or local consumer protection laws. An above-the-line deduction reduces taxable income without requiring itemization and would apply to fees and costs paid in taxable years after the law's enactment. The provision addresses the issue where settlement amounts are taxable as income while attorney fees previously had limited deductibility, creating a tax burden on consumers who prevail in consumer protection cases.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
6 cosponsors
- Sen. Bennet, Michael F. [D-CO] (D-CO)
- Sen. Booker, Cory A. [D-NJ] (D-NJ)
- Sen. Kaine, Tim [D-VA] (D-VA)
- Sen. Murray, Patty [D-WA] (D-WA)
- Sen. Shaheen, Jeanne [D-NH] (D-NH)
- Sen. Welch, Peter [D-VT] (D-VT)
Actions (2)
- Feb 6, 2025 Read twice and referred to the Committee on Finance. · senate
- Feb 6, 2025 Introduced in Senate
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE SENATE OF THE UNITED STATES
February 6 (legislative day, February 5), 2025
Ms. Cortez Masto (for herself, Mrs. Murray, Mrs. Shaheen, Mr. Kaine, Mr. Bennet, and Mr. Booker) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to allow an above-the-line deduction for attorney fees and costs in connection with consumer claim awards.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “End Double Taxation of Successful Consumer Claims Act”.
SEC. 2. ABOVE-THE-LINE DEDUCTION FOR ATTORNEY FEES AND COSTS IN CONNECTION WITH CONSUMER CLAIM AWARDS.
(a) In General.—The first sentence of paragraph (20) of section 62(a) of the Internal Revenue Code of 1986 is amended by inserting “or a claim of a consumer protection violation (as defined in subsection
(f))” after “section 1862(b)(3)(A) of the Social Security Act (42 U.S.C. 1395y(b)(3)(A))”.
(b) Consumer Protection Violation Defined.—Section 62 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
“(f) Consumer Protection Violation Defined.—For purposes of subsection (a)(20), the term ‘consumer protection violation’ means an act that is unlawful under any of the following:
“(1) Section 987 of title 10, United States Code.
“(2) Section 6, 8, or 9 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605, 2607, or 2608).
“(3) The Expedited Funds Availability Act (12 U.S.C. 4001 et seq.).
“(4) The Homeowners Protection Act of 1998 (12 U.S.C. 4901 et seq.).
“(5) The Truth in Lending Act (15 U.S.C. 1601 et seq.).
“(6) The Credit Repair Organizations Act (15 U.S.C. 1679 et seq.).
“(7) The Fair Credit Reporting Act (15 U.S.C. 1681 et seq.).
“(8) The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.).
“(9) The Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.).
“(10) The Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.).
“(11) The Interstate Land Sales Full Disclosure Act (15 U.S.C. 1701 et seq.).
“(12) The Consumer Product Safety Act (15 U.S.C. 2051 et seq.).
“(13) The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (15 U.S.C. 2301 et seq.).
“(14) The Servicemembers Civil Relief Act (50 U.S.C. 3901 et seq.).
“(15) Any provision of Federal law prohibiting unfair or deceptive trade or credit practices.
“(16) Any provision of Federal, State, or local law, or common law claims permitted under Federal, State, or local law—
“(A) providing for the enforcement of consumer protection, or
“(B) regulating any aspect of consumer transactions, including claims for unfair, deceptive, or abusive trade or credit practices, or for other actions that cause harm to an individual by a seller or provider of property, services, securities or other investments, money, or credit for personal, family, or household use.”.
(c) Effective Date.—The amendments made by this section shall apply to attorney fees and court costs paid during taxable years ending after the date of the enactment of this Act with respect to any judgment or settlement occurring during such taxable years. <all>
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