Washington, D.C. — Colorado U.S. Senator Michael Bennet joined U.S. Senator Catherine Cortez Masto (D-Nev.) to reintroduce legislation to protect American consumers from unfair taxation of court-awarded fees. The End Double Taxation of Successful Consumer Claims Act will ensure Coloradans who sue corporations for fraud and other harms are not unfairly taxed on fees awarded to their attorneys. U.S. Representative Steven Horsford (D-Nev.) introduced companion legislation in the House of Representatives.

“Coloradans should be able to hold corporations accountable in court, but our tax code too often punishes successful consumer claims and can deter Americans from bringing these cases in the first place,” said Bennet. “I’m glad to join my colleagues to introduce this legislation and make it easier for consumers to stand up to fraud and abuse."

“It’s past time we change outdated tax laws that are punishing consumers who take on big corporations after becoming victims of fraud,” said Cortez Masto. “My commonsense legislation will make it easier to hold bad actors accountable and make sure defrauded Nevadans get the compensation they deserve.”

Currently, the U.S. tax code unfairly penalizes consumers who sue corporations or companies for abuse or fraud. Consumers who win their cases often receive money to cover damages and their lawyer fees. However, the tax code makes plaintiffs pay income tax on the full amount awarded by a court, even though the consumers personally receive only damages, not the attorneys’ fees. Many consumer fraud cases award only small amounts in damages, and if the consumer is taxed for the total amount, the taxes they owe often end up exceeding the amount they are personally awarded. This bill will ensure that consumers are not liable for federal income taxes on money awarded to their attorneys.

The text of the bill is available HERE.