[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2755 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 2755

 To amend the Internal Revenue Code of 1986 to provide for the income 
  tax treatment of legal fees awarded or received in connection with 
                   nonphysical personal injury cases.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 7, 2005

 Mr. Andrews 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 provide for the income 
  tax treatment of legal fees awarded or received in connection with 
                   nonphysical personal injury cases.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Victims Tax Fairness Act of 2005''.

SEC. 2. LEGAL FEES AWARDED OR RECEIVED IN CONNECTION WITH NONPHYSICAL 
              PERSONAL INJURY CASES.

    (a) Inclusion in Gross Income.--Part II of subchapter B of chapter 
1 of the Internal Revenue Code of 1986 (relating to items specifically 
included in gross income) is amended by adding at the end the following 
new section:

``SEC. 91. LEGAL FEES AWARDED OR RECEIVED IN CONNECTION WITH 
              NONPHYSICAL PERSONAL INJURY CASES.

    ``Gross income includes amounts awarded to or received by the 
taxpayer, whether by suit or agreement, on account of nonphysical 
personal injury which are designated for attorneys' fees and costs.''.
    (b) Deduction for Legal Fees Awarded or Received in Connection With 
Nonphysical Personal Injury Cases Allowed Whether or not Taxpayer 
Elects to Itemize.--Subsection (a) of section 62 of such Code (relating 
to general rule) is amended by redesignating paragraph (19) (relating 
to costs involving discrimination suits, etc. ) as paragraph (20) and 
by inserting after such paragraph (20) the following new paragraph:
            ``(20) Legal fees awarded or received in connection with 
        nonphysical personal injury cases.--Attorneys' fees and costs 
        awarded to or paid by the taxpayer, whether by suit or 
        agreement, on account of nonphysical personal injury.''.
    (c) Clerical Amendment.--The table of sections for part II of 
subchapter B of chapter 1 of such Code is amended by adding at the end 
the following new item:

``Sec. 91. Legal fees awarded or received in connection with 
                            nonphysical personal injury cases.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to judgments and settlements entered after the date 
of the enactment of this Act.
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