H.R. 3314

To amend the Internal Revenue Code of 1986 to allow the deduction of attorney-advanced expenses and court costs in contingency fee cases.

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I

110th CONGRESS

1st Session

H. R. 3314

IN THE HOUSE OF REPRESENTATIVES

August 2, 2007

Mr. Davis of Alabama (for himself and Mr. King of New York) 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 allow the deduction of attorney-advanced expenses and court costs in contingency fee cases.

1.

Attorney-Advanced Expenses and Court Costs in Contingency Fee Cases

(a)

In general

Section 162 of the Internal Revenue Code of 1986 (relating to trade or business expenses) is amended by redesignating subsection (q) as subsection (r) and by inserting after subsection (p) the following new subsection:

(q)

Attorney-advanced expenses and court costs in contingency fee cases

For purposes of subsection (a), expenses and court costs—

(1)

which are paid or incurred by an attorney, and

(2)

the repayment of which is contingent on a recovery by judgment or settlement in the action to which such expenses and costs relate,

shall be deemed not to be subject to repayment.

.

(b)

Effective date

The amendment made by this section shall apply to expenses and costs paid or incurred in taxable years beginning after the date of the enactment of this Act.