Shaheen Helps Introduce Bill to Protect Granite Staters Who Hold Corporations Accountable in the Courts

(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH), led by U.S. Senator Catherine Cortez Masto (D-NV), helped reintroduce legislation to protect American consumers who sue corporations after being defrauded. The End Double Taxation of Successful Consumer Claims Act will help ensure people who win fraud cases receive the full amount of damages they are awarded, rather than being unfairly taxed on fees awarded to their attorneys. In addition to Shaheen and Cortez Masto, the bill is cosponsored by U.S. Senators Michael Bennet (D-CO), Patty Murray (D-WA), Cory Booker (D-NJ) and Tim Kaine (D-VA).   

“Victims of fraud who successfully sue corporations should not be forced to pay taxes on payouts awarded to their attorneys,” said Senator Shaheen. “Under the current system, fraud victims often find their hard-fought legal victories weakened by a tax bill that can amount to thousands of dollars on income they’ll never see. This bill would help ensure consumers don’t owe taxes on money they didn’t get, better hold bad actors accountable and improve conditions for all consumers.”

Currently the U.S. tax code unfairly penalizes people who sue corporations or companies for abuse or fraud. Consumers who win their cases often receive money to cover damages and their lawyer fees. But the tax code makes plaintiffs pay income tax on the full amount awarded by a court, even though some of that money goes to attorneys’ fees and not directly to the consumers. Many consumer fraud cases award only small amounts in damages, and if the consumer is taxed for the total amount they often end up owing more money in taxes than they are personally awarded. The End Double Taxation of Successful Consumer Claims Act will ensure that consumers are not liable for federal income taxes on money awarded to their attorneys. 

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