A proposed litigation funding tax levy was removed from the Republican tax and spending deal by a Senate referee who ruled that the proposed tax was not compliant with the expedited procedure Republicans were using to pass the legislation. The removal of the levy is a victory for litigation funders and the growing business of litigation finance.  

As noted in the Bloomberg Law article, “Litigation Finance Levy Cut From Tax Bill by Senate Referee,” an analysis of the bill by Schulte lawyers said the real tax rate for funders could reach as high as 65% when accounting for taxes paid when distributing earnings. Our lawyers noted, “There is little precedent for the establishment of an entirely new income tax system dedicated to a particular industry.” 

Read Schulte’s analysis of the bill.