End Double Taxation of Successful Consumer Claims Act

# End Double Taxation of Successful Consumer Claims Act (S 467) **What the bill would do:** This bill aims to prevent consumers from being taxed twice when they win settlement money or judgments in legal cases. Currently, when a consumer receives compensation from a lawsuit, they may have to pay federal income taxes on that money. If their lawyers took a percentage of the settlement as a fee (which is common in consumer lawsuits), the consumer still owes taxes on the full amount—including the portion that went to the attorney.

The bill would change this so consumers only pay taxes on the money they actually keep after attorney fees are deducted. **Who it affects and key details:** This primarily affects everyday people pursuing consumer lawsuits—for example, cases involving defective products, employment disputes, or fraud. It also impacts the legal system's incentive structure, since the current tax rule can make it harder for consumers to afford attorneys or accept settlements. The bill is currently in committee, meaning it's still in the early stages of the legislative process and hasn't been debated or voted on by the full Senate yet.