S 1821

This bill, the Tackling Predatory Litigation Funding Act, aims to tax income received by third parties involved in litigation financing agreements. It proposes a new tax on ‘qualified litigation proceeds’ – profits gained from litigation where funds were provided through such agreements – calculated as 3.8 percentage points plus the regular tax rate. The bill also establishes a withholding requirement for payments made to these third parties, ensuring a significant portion of the profits is subject to taxation. It clarifies definitions related to litigation financing and includes provisions to prevent certain types of litigation financing agreements from being exempt from the tax.