Treasury is Mum on Trial Lawyer Tax Break

The U.S. Treasury has yet to comply with a request by a U.S. Senator for information regarding a possible tax break for trial lawyers who are working on a contingency fee basis, Legal Newsline reports.

Estimated at $1.6 billion, the tax break was requested by the trial lawyers’ national association: the so-called “American Association of Justice.”  According to sources, trial lawyer lobbyist John Bowman told the trial lawyers’ association that an order from the Treasury Department could come soon granting the tax break at their convention in Vancouver, Canada this past July.

U.S. Senator Chuck Grassley has requested information from the Treasury Department on the issue, but has yet to receive a response from officials.  Congress did not approve legislation that would have granted the tax break, and the fact that the trial lawyers are lobbying for an executive rule-change in the tax code is highly-questionable. Historically, trial lawyers have been huge campaign donors to the Democratic party. If the Treasury Department changes the rule and permits the tax break, it could raise serious questions about pay-to-play arrangements between trial lawyers and politicians at the highest levels of our federal government.