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Different expert here.
Below is an excerpt from RIA Checkpoint. You may or may not be deduct the bail bond fees depending on the specifics of your situation.
¶L-2936. Deductibility of legal fees to defend business-related criminal charges.
Attorney's fees, court costs, and other legal expenses can qualify as deductible trade or business expenses or as deductible nonbusiness expenses incurred for the production of income or the management, conservation, or maintenance of income producing property
, but legal expenses aren't deductible if they are capital expenditures
expenses of the taxpayer, see ¶ L-2900 et seq.
Legal fees incurred by an individual in defense against criminal charges arising out of his business activities are deductible, 11 even though the individual is convicted. 12
So, legal expenses and bail bond fees incurred in an unsuccessful defense against extortion charges were deductible by a taxpayer who had been a purchasing agent for a city and had taken part in a kickback scheme. The Tax Court held that he was in the trade or business of being an employee of that city. 13
The Tax Court permitted a member of an organized crime family convicted of conspiracy and mail and wire fraud to deduct legal fees. The charges related to a plan to invest in an Indian Reservation gambling operation and use it to launder funds from other illegal activities of the crime family. The criminal charges originated from his business activities as a member of the crime family. 13.1 Similarly, a taxpayer could deduct the legal expenses incurred in creating the Virginia Environmental Endowment Fund to alleviate the effects of a highly toxic chemical pesticide that taxpayer allegedly discharged into local
waters. Payment to the Fund was considered, in substance, to be a criminal fine. 14
The Eighth Circuit upheld deductions of attorneys' fees incurred in an unsuccessful defense of quo warranto proceedings brought by a state against an outside corporation for intentional violation of state laws. 15
. . . Balance of paragraph omitted.
IRS Letter Ruling(NNN) NNN-NNNN IRS Letter Ruling(NNN) NNN-NNNN Citron-Byer Co, (1930) 21 BTA 308; Headley, Hal, (1938) 37 BTA 738; International Trading Co, (1958) TC Memo 1958-104, PH TCM ¶58104, 17 CCH TCM 521, affd on other issue (1960, CA7) 5 AFTR 2d 970, 275 F2d 578, 60-1 USTC ¶9335; Kaufman, Morgan S., (1949) 12 TC 1114, acq.
Com. v. Tellier, Walter F., (1966, S Ct) 17 AFTR 2d 633, 383 US
687, 16 L Ed 2d 185, 66-1 USTC ¶9319, affg on this issue(1965, CA2) 15 AFTR 2d 416, 342 F2d 690, 65-1 USTC ¶9252, revg on this issue (1963) TC Memo 1963-212, PH TCM ¶63212, 22 CCH TCM 1062.
Murphy, Bernard G., (1980) TC Memo 1980-25, PH TCM ¶80025, 39 CCH TCM 958.
Difronzo, John, (1998) TC Memo 1998-41, RIA TC Memo ¶98041, 75 CCH TCM 1693.
Allied-Signal Inc, (1992) TC Memo 1992-204, RIA TC Memo ¶92204, 63 CCH TCM 2672, affd(1995, CA3) 75 AFTR 2d 95-1287, 54 F3d 767, 95-1 USTC ¶50151.
Riss & Co Inc, (1964) TC Memo 1964-190, PH TCM ¶64190, 23 CCH TCM 1113, affd, revd & remdsub nom Com. v. Richard Riss Sr., (1967, CA8) 19 AFTR 2d 880, 374 F2d 161, 67-1 USTC ¶9292.
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