Tax Consequences of NDAs for Sexual Harassment Settlements under the 2017 Tax Cuts and Jobs Act

Non-disclosure agreements (NDAs) are common practice in the world of litigation. Lawsuits are filed, a certain amount of discovery ensues, and the parties often reach a settlement agreement, which is almost always confidential. As attorneys, we make these settlements confidential, in theory, to protect all parties. In reality, NDAs are most often drafted to protect defendants who likely have been accused of all manner of horrible things, some of which may be true, some not.