Introduction
In December 2024, the IRS announced a new national enforcement campaign targeting attorney fee deferral arrangements. The resulting uncertainty raised serious questions within the legal and settlement planning communities: Does the campaign challenge all fee deferrals, or only those that deviate from long-standing precedent?
Originally published in Tax Notes on June 9, 2025, this article by George A. Luecke and Patrick J. Hindert of Independent Life addresses that critical question. Drawing on extensive legal, regulatory, and enforcement developments — including Childs v. Commissioner, IRS interpretive guidance, the controversial GLAM 2022-007, the Brook Hollow investigation, and the Supreme Court’s Loper Bright decision — the Luecke and Hindert conclude that properly structured, Childs-compliant attorney fee deferrals remain legally sound and outside the scope of the IRS campaign.
This article offers essential insights for attorneys and settlement planners navigating the evolving landscape of attorney compensation deferral.
Independent Life Insurance Company does not provide tax, legal, or financial advice. The information contained herein is for general informational and educational purposes only and is not intended to serve as a substitute for personalized advice from qualified professionals. Attorneys considering deferring their fees must rely on their own independent legal, tax, and financial advisors to evaluate the potential benefits, risks, and consequences of any transaction.
