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High Court OKs Double Tax on Some Contingent Fees
In a pair of cases with potential pocketbook impact on lawyers and their clients, the Supreme Court ruled on January 24th that the contingent fee portion of lawsuit settlements and awards is taxable to the client, even if the money goes directly to the attorney. But initial reaction to the 8-0 decision was more muted than expected because a law passed by Congress last fall limits the ruling's implications, and the decision won't doom the contingent fee system, which fuels a broad range of private litigation.
While the cases ' Commissioner of Internal Revenue v. Banks and Commissioner of Internal Revenue v. Banaitis ' were pending last fall, Congress passed a provision allowing taxpayers who win awards in employment, whistleblower, and civil rights litigation not to count attorney fees and court costs as taxable income. [See the November 2004 edition of A&FP for coverage and background on that legislation.] Congress already allows this for lawyer fees in personal injury cases. In addition, Justice Anthony Kennedy, in his opinion for the Court, explicitly said he was not ruling on the tax implications of other federal laws that provide attorney fees, some of which exceed the award the plaintiff receives.
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When we consider how the use of AI affects legal PR and communications, we have to look at it as an industrywide global phenomenon. A recent online conference provided an overview of the latest AI trends in public relations, and specifically, the impact of AI on communications. Here are some of the key points and takeaways from several of the speakers, who provided current best practices, tips, concerns and case studies.