March 01, 2018

Harvey Weinstein Tax May Hit Both Plaintiffs and Defendants

Robert W. Wood

Editor’s Note

Last month, GPSolo eReport ran an excellent article written by Scott P. Horton about amendments to Section 162 of the Tax Code relating to the deductibility of payments for “Harvey Weinstein” claims. Horton’s article and the one below even question the deductibility of payments made to plaintiff’s counsel for attorney’s fees and whether those attorney’s fees are income to the plaintiff. Horton concluded that many questions still exist regarding the scope and breadth of this provision and even regarding to whom it applies. The following article further amplifies the concerns raised by Horton and poses additional questions for attorneys who practice in this area to consider. This article even questions whether all settlements that contain confidentiality language need some language detailing the scope the matter, or at least some recognition that harassment is not part of the case. The article then addresses circumstances when harassment is part of the case, including types of allocation of the settlement, and then speaks about whether the IRS can revise that allocation. I hope you find this article as interesting as I did.

Reprinted with permission from Business Law Today, February 14, 2018. ©2018 by the American Bar Association. Reprinted with permission. All rights reserved. This information or any or portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.

Harvey Weinstein, Kevin Spacey, Bill O’Reilly, and many other figures in the business and entertainment world have been accused of serious acts of sexual harassment. The torrent that was unleashed came to be known on social media as the #MeToo movement. As 2017 drew to a close, Time Magazine selected the “Silence Breakers” as its person of the year. See Edward Felsenthal, The Choice, Time (Dec. 6, 2017).

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