“Business expenses are still tax-deductible,” Wood said. “That’s true with legal fees as well—having lawyers is something businesses have to do. If the business pays the freight, the business writes it off.”
Certain types of lawsuits aren’t affected by the law, Wood noted. That list includes physical-injury cases, which are tax-free, lawsuits against an employer and class-action suits, in which lawyers are paid separately.
But the list of cases that are affected is much longer, and includes lawsuits for defamation, invasion of privacy, wrongful arrest and a host of other scenarios.