Why Civil Rights Lawyers Should Study Tax

55 Pages Posted: 17 May 2006  

Stephen B. Cohen

Georgetown University Law Center

Laura Sager

New York University School of Law

Abstract

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.

Suggested Citation

Cohen, Stephen B. and Sager, Laura, Why Civil Rights Lawyers Should Study Tax. 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. Available at SSRN: https://ssrn.com/abstract=902686

Stephen B. Cohen (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States
202-662-9068 (Phone)
202-662-9444 (Fax)

Laura Sager

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States
(212) 998-6430 (Phone)

HOME PAGE: http://www.law.nyu.edu/faculty/profiles/fulltime/s

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