I 
118TH CONGRESS 
1ST SESSION 
H. R. 176 
To amend the Internal Revenue Code of 1986 to establish a deduction 
for attorney fees awarded with respect to certain wildfire damages and 
to exclude from gross income settlement funds received with respect 
to such damages. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 9, 2023 
Mr. LAMALFA (for himself, Mr. THOMPSON of California, Mr. MCCLINTOCK, 
and Mr. HUFFMAN) introduced the following bill; which was referred to 
the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to establish 
a deduction for attorney fees awarded with respect to 
certain wildfire damages and to exclude from gross in-
come settlement funds received with respect to such dam-
ages. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. ABOVE THE LINE DEDUCTION FOR ATTORNEY 
FEES RELATING TO AWARDS FOR PROPERTY 
DAMAGE DUE TO CERTAIN WILDFIRES. 
(a) IN GENERAL.—Section 62(a) of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new paragraph: 
‘‘(22) ATTORNEY FEES AND COURT COSTS RE-
LATING
TO
AWARDS
WITH
RESPECT
TO
CERTAIN 
WILDFIRES.— 
‘‘(A) IN GENERAL.—Any deduction allow-
able under this chapter for attorney fees and 
court costs paid by, or on behalf of, the tax-
payer in connection with any award with re-
spect to a qualifying wildfire disaster. The pre-
ceding sentence shall not apply to any deduc-
tion in excess of the amount includible in the 
taxpayer’s gross income for the taxable year on 
account of a judgment or settlement (whether 
by suit or agreement and whether as lump sum 
or periodic payments) resulting from such 
claim. 
‘‘(B) QUALIFYING WILDFIRE DISASTER.— 
For purposes of subparagraph (A), the term 
‘qualifying wildfire disaster’ means any forest 
or range fire that— 
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‘‘(i) is a federally declared disaster (as 
such 
term 
is 
defined 
in 
section 
165(i)(5)(A)), 
‘‘(ii) occurs in a disaster area (as such 
term is defined in section 165(i)(5)(B)), 
and 
‘‘(iii) occurs in calendar year 2015 or 
later.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to attorney fees and court costs 
awarded after May 31, 2020. 
SEC. 2. EXCLUSION OF CERTAIN WILDFIRE SETTLEMENT 
PROCEEDS FROM GROSS INCOME. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139I the following new section: 
‘‘SEC. 139J. CERTAIN WILDFIRE SETTLEMENT PROCEEDS. 
‘‘(a) IN GENERAL.—Gross income shall not include 
amounts paid by a qualified settlement fund established 
to compensate victims for losses or damages in connection 
with a qualifying wildfire disaster (as defined in section 
62(a)(22)(B)). 
‘‘(b) QUALIFIED SETTLEMENT FUND.—The term 
‘qualified settlement fund’ has the meaning given such 
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term in Section 1.468B–1 of title 26, Code of Federal 
Regulations.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code 
is amended by inserting after the item relating to section 
139I the following new item: 
‘‘Sec. 139J. Certain wildfire settlement proceeds.’’. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts paid after May 31, 
2020. 
Æ 
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