{"id":178,"date":"2019-03-11T13:42:08","date_gmt":"2019-03-11T13:42:08","guid":{"rendered":"https:\/\/www.sherin.com\/employment-blog\/?p=178"},"modified":"2021-06-10T19:01:55","modified_gmt":"2021-06-10T19:01:55","slug":"update-irs-says-ndas-dont-prevent-plaintiffs-from-deducting-attorneys-fees-in-sexual-harassment-settlements","status":"publish","type":"post","link":"https:\/\/www.sherin.com\/employment-blog\/2019\/03\/11\/update-irs-says-ndas-dont-prevent-plaintiffs-from-deducting-attorneys-fees-in-sexual-harassment-settlements\/","title":{"rendered":"UPDATE: IRS Says NDAs Don\u2019t Prevent Plaintiffs from Deducting Attorneys&#8217; Fees in Sexual Harassment Settlements"},"content":{"rendered":"<p>The 2017 Tax Cuts and Job Act (the \u201cAct\u201d), contained troubling language for plaintiffs seeking to settle sexual harassment claims \u2013 section 162(q). In an apparent effort to shine light on workplace sexual harassment, the Act prohibited the deduction of attorneys\u2019 fees in the settlement of such claims when the settlement contained a nondisclosure agreement (\u201cNDA\u201d).<\/p>\n<p>As we wrote back in August, many viewed the Act as effectively, and unfairly, penalizing sexual harassment plaintiffs. You can find our article <a href=\"https:\/\/www.sherin.com\/wp-content\/uploads\/2015\/05\/BBJ-MeToo.pdf\">here<\/a>. Luckily for sexual harassment plaintiffs, the IRS recently made clear its view that the Act does <em><strong>not<\/strong><\/em> penalize plaintiffs.<\/p>\n<p>On February 28, 2018 the IRS issued guidance that plaintiffs settling sexual harassment claims<strong><em> are<\/em><\/strong> permitted to deduct attorneys\u2019 fees even if the settlement contains an NDA. <a href=\"https:\/\/www.irs.gov\/newsroom\/section-162q-faq\">You can find the IRS guidance here<\/a>. This guidance provides some reassurance for the time being, but it is no substitute for a long-term legislative fix to section 162(q).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 2017 Tax Cuts and Job Act (the \u201cAct\u201d), contained troubling language for plaintiffs seeking to settle sexual harassment claims \u2013 section 162(q). In an apparent effort to shine light on workplace sexual harassment, the Act prohibited the deduction of attorneys\u2019 fees in the settlement of such claims when the settlement contained a nondisclosure agreement [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":122,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","_links_to":"","_links_to_target":""},"categories":[82,1,83],"tags":[53],"class_list":["post-178","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cases-to-note","category-general","category-updates-in-employment-law","tag-metoo"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UPDATE: IRS Says NDAs Don\u2019t Prevent Plaintiffs from Deducting Attorneys&#039; Fees in Sexual Harassment Settlements - Employment<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.sherin.com\/employment-blog\/2019\/03\/11\/update-irs-says-ndas-dont-prevent-plaintiffs-from-deducting-attorneys-fees-in-sexual-harassment-settlements\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPDATE: IRS Says NDAs Don\u2019t Prevent Plaintiffs from Deducting Attorneys&#039; Fees in Sexual Harassment Settlements - Employment\" \/>\n<meta property=\"og:description\" content=\"The 2017 Tax Cuts and Job Act (the \u201cAct\u201d), contained troubling language for plaintiffs seeking to settle sexual harassment claims \u2013 section 162(q). 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