Establishes a tax on income from litigation received by third-party entities that provided financing for such litigation.

The bill amends the Internal Revenue Code to introduce a tax on income from litigation received by third-party entities that provided financing for such litigation. It defines "qualified litigation proceeds" and imposes a tax on these proceeds, which are excluded from gross income. The tax is applied at the entity level for pass-through entities and includes special rules for refunds, credits, and withholding. The amendments apply to taxable years beginning after December 31, 2025.

Establishes a tax on income from litigation received by third-party entities that provided financing for such litigation.

The bill amends the Internal Revenue Code to introduce a tax on income from litigation received by third-party entities that provided financing for such litigation. It defines "qualified litigation proceeds" and imposes a tax on these proceeds, which are excluded from gross income. The tax is applied at the entity level for pass-through entities and includes special rules for refunds, credits, and withholding. The amendments apply to taxable years beginning after December 31, 2025.