Texans for Lawsuit Reform

Through political action, legal, academic and market research, and grassroots initiatives, TLR fights for common-sense reforms that keep Texas open for business.

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In the News

A Tax Break for Trial Lawyers

Wall Street Journal, November 7, 2021

The House Democrats’ 2,100-page budget bill is chock full of goodies for liberal special interests, and one of the worst is a tax break for their dear friends in the plaintiffs bar. While raising taxes on businesses, Democrats want to subsidize more frivolous lawsuits against business.

The IRS generally bars lawyers working on contingency-fee cases from deducting expenses such as depositions, expert testimony and discovery until a case resolves. In contingency-fee arrangements, attorneys front the costs of a lawsuit in return for some share—usually 30% to 40%—of the client’s eventual settlement or award.

Under longstanding IRS rules, these expenses are treated like non-deductible loans to clients since they may eventually get reimbursed at the end of a case when their client settles or wins. In the rare case there’s no recovery, they can write them off like a bad loan.

Tax courts and federal appellate courts have consistently upheld this interpretation dating to the 1930s. The Ninth Circuit Court of Appeals in 1995 created a carve-out for a certain type of contingency contract. But the IRS has limited this interpretation to states in the Ninth Circuit, which is a mecca for contingency-fee lawsuits.

Under the House bill, trial attorneys nationwide would be allowed to deduct contingency-fee expenses “disregarding the possibility that such amount will be repaid.” The bill also says “income attributable to any related recovery shall not be reduced by such amount.’’ The deduction would cost $2.5 billion over a decade, according to the Joint Committee on Taxation.

By reducing trial lawyers’ legal costs, it would effectively subsidize contingency-fee cases. Lawyers will be more likely to file dubious lawsuits and drag out cases if they can immediately deduct their expenses. This is a direct income transfer to plaintiffs’ lawyers, who will turn around and finance Democratic election campaigns. It’s the definition of a corrupt political bargain.

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Texans for Lawsuit Reform

22 hours ago

Texans for Lawsuit Reform

In case you missed it - 15 Harris County judges resolved fewer felony cases during the pandemic, and all 23 courts have more pending cases now than when the COVID epidemic began. As of March, there were over 48,000 pending active cases in Criminal District Court. Read and share: bit.ly/3yeuPc7 ... See MoreSee Less

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'Do your job,' victim tells judge in Harris County's slowest court

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Fifteen judges resolved fewer felony cases during the pandemic and all 23 courts have more pending cases now than when the pandemic began. Harris County Judge Ramona Franklin, of the 338th Criminal Di...
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Texans for Lawsuit Reform

2 days ago

Texans for Lawsuit Reform

The Dallas County DA argued a judge’s impartiality could reasonably be questioned after she lowered a defendant’s bail considerably while his defense lawyer is one of her top campaign contributors, and then raised his bail after media reports about her rulings. Read and share: bit.ly/3lfQMzM ... See MoreSee Less

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Dallas judge under scrutiny for bail rulings recuses herself from cases

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Judge Chika Anyiam, of Criminal District Court 7, recused herself Monday from 10 felony cases against Julio Guerrero. A Dallas County judge who faced public scrutiny for lowering a murder suspect’s ...
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Texans for Lawsuit Reform

3 days ago

Texans for Lawsuit Reform

TLR General Counsel Lee Parsley joined the U.S. Chamber Institute for Legal Reform podcast to discuss nuclear verdicts in the trucking industry and what legislators can do to ensure that excessive lawsuits don't shut down this vital industry. Listen and share: bit.ly/3wjgKJ9 ... See MoreSee Less

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Nuclear Verdicts Create Litigation "Vortex" for Trucking Industry

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In this episode of Cause for Action, Nathan Morris, senior vice president, legal reform advocacy at the U.S. Chamber of Commerce Institute for Legal Reform, is joined by Lee Parsley, the general couns...
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lawsuitreform avatarTLR@lawsuitreform·
16h 1527408930703523840

Since TLR’s founding, our supporters have made their voices heard at the Capitol by phone, e-mail, & personal visits on every issue that affects a healthy civil justice system. Make your voice heard & get involved with TLR today!

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Texans for Lawsuit Reform has thousands of supporters from across Texas who are committed to a fair and balanced civil justice system.

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lawsuitreform avatarTLR@lawsuitreform·
22h 1527318698804908040

#ICYMI: 15 Harris County judges resolved fewer felony cases during the pandemic & all 23 courts have more pending cases now than when the COVID epidemic began. As of March, there were over 48,000 pending active cases in Criminal District Court. Read & RT:

'Do your job,' victim tells judge in Harris County's slowest court

Fifteen judges resolved fewer felony cases during the pandemic and all 23 courts have more pending cases now than when the pandemic began. Harris Coun...

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lawsuitreform avatarTLR@lawsuitreform·
18 May 1527046564635721728

Want to make a difference in the fight against lawsuit abuse? Join the TLR team today! #stoplawsuitabuse

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Texans for Lawsuit Reform has thousands of supporters from across Texas who are committed to a fair and balanced civil justice system.

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Texans for Lawsuit Reform
1701 Brun Street
Houston, Texas 77019

Ph. 713-963-9363
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