Join 250,000+
professionals today
Add Insights to your inbox - get the latest
professional news for free.
The Tax Side of Litigation Funding Transactions
Join our 250K+ subscribers
Join our 250K+ subscribers
Subscribe18 JUN 2026 / ACCOUNTING & TAXES
Litigation funding for plaintiffs, lawyers, and law firms can be problematic for tax purposes due to questions over whether the arrangement constitutes a loan or part of a future recovery depending on the case's success. The IRS's perspective on litigation funding matters, as it has implications for tax treatment, and even potential legislative action, such as the proposed Tackling Predatory Litigation Funding Act that aims to impose a large tax on litigation proceeds received by third-party funders.
Litigation funding sounds simple until the tax bill walks into the room wearing reading glasses. A plaintiff, lawyer, or law firm gets cash before a case ends. The funder takes a slice of the recovery if the case succeeds. If the case fails, the recipient...
Until next time…
Don’t forget to share this story on LinkedIn, X and Facebook
Subscribe now for $199 and get unlimited access to MYCPE ONE, from CPE credits to insights Magazine
📢MYCPE ONE Insights has a newsletter on LinkedIn as well! If you want the sharpest analysis of all accounting and finance news without the jargon, Insights is the place to be! Click Here to Join
You’ve reached the 3 free-content piece limit. Unlock unlimited access to all News & CPE resources.
Subscribe Today.
Already have an account?
Sign In
-1783514395.webp)
