H.R. 3181

To amend the Internal Revenue Code of 1986 to exclude from gross income qualified attorney fees.

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I

109th CONGRESS

1st Session

H. R. 3181

IN THE HOUSE OF REPRESENTATIVES

June 30, 2005

Mr. Paul introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to exclude from gross income qualified attorney fees.

1.

Exclusion of attorney fees

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section:

139B.

Qualified attorney fees

(a)

General rule

In the case of an individual, gross income does not include qualified attorney fees paid by the individual.

(b)

Qualified attorney fees

For purposes of this section, the term qualified attorney fees means attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from a civil action brought by the taxpayer in a court of law.

.

(b)

Clerical amendment

The table of sections for such part is amended by inserting after the item relating to section 139A the following new item:

Sec. 139B. Qualified attorney fees

.

(c)

Effective date

The amendments made by this section shall apply to attorney fees paid on or after January 1, 2005, with respect to any judgment or settlement occurring on or after January 1, 2005.