End Double Taxation of Successful Consumer Claims Act

This bill proposes to amend the Internal Revenue Code of 1986, allowing an above-the-line deduction for attorney fees and costs incurred in connection with awards from consumer protection claims. This deduction would directly reduce a taxpayer's gross income, thereby preventing consumers from being taxed on the portion of their award that goes to legal expenses. The legislation broadly defines a "consumer protection violation" to encompass acts unlawful under numerous federal statutes, such as the Truth in Lending Act, Fair Credit Reporting Act, and Fair Debt Collection Practices Act. It also extends to any federal, state, or local law prohibiting unfair or deceptive trade or credit practices, or regulating consumer transactions, including common law claims. By allowing this deduction, the bill seeks to alleviate the financial burden on individuals who successfully pursue consumer claims, ensuring they are not effectively taxed twice on their recovery. The amendments would apply to attorney fees and court costs paid during taxable years ending after the date of enactment, specifically for judgments or settlements occurring in those years.