Why Civil Rights Lawyers Should Study Tax
Stephen B. Cohen
Georgetown University Law Center
New York University School of Law
Harvard Blackletter Law Journal, Vol. 22, Spring 2006
Georgetown Public Law Research Paper No. 902686
Georgetown Law and Economics Research Paper No. 902686
NYU Law School, Public Law Research Paper No. 06-12
Civil rights and income taxation may seem as far apart as any two legal subjects could be, but actually intersect in a surprising number of significant ways. Whenever money damages are sought in civil rights litigation, the tax treatment of damages will affect the amount that actually benefits the plaintiff after taxes. Even when litigation seeks non-money damages, as in predatory lending cases, civil rights lawyers need to attempt to structure the relief so that it does not cause undesirable tax consequences, such as income arising from forgiveness of debt. Civil rights lawyers may also need to analyze the financial consequences of tax benefits, such as tax-exempt status, in order to ascertain whether such benefits raise issues under the First Amendment's Establishment Clause and the Fourteenth Amendment's Equal Protection Clause. This essay discusses the intersection of civil rights law and income taxation in the three areas mentioned above: damages for unlawful discrimination, the forgiveness of debt by a predatory lender, and tax-exempt status for private educational and religious institutions. We conclude that civil rights lawyers need to be aware of potential tax implications of civil rights litigation to a surprising degree.
Number of Pages in PDF File: 55Accepted Paper Series
Date posted: May 17, 2006
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