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Good afternoon, I have brought a wrongful termination action

Good afternoon, I have brought a...
Good afternoon,

I have brought a wrongful termination action in DC Superior Court. I have a question about whether or not the legal fees are deductible on my federal income taxes. If so, please cite the relevant case law or IRS opinions on this matter.

I have looked at IRS Publication 529 entitled Miscellaneous Deductions wherein it states on Page 5, that "You can deduct legal fees related to doing or keeping your job. The facts of my case do not fit neatly within the wording of 529. This is common question. With that said, I believe that the has been case law on this issue and or IRS opinions written on this topic.

This matter has been in court for quite sometime and the legal fees have mounted. In order to pay the legal fees, I have had to withdraw funds from my IRA.

Thank you for your assistance in this matter. It is appreciated.
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Answered in 2 hours by:
6/3/2013
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,162
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LEV :

Hi and welcome to Just Answer!
Generally may be able to deduct attorney fees and court costs paid in connection with the civil action - as long as such expenses are related to taxable income.


Specifically for your situation - please see IRS publication 525 - page 29 - left column - http://www.irs.gov/pub/irs-pdf/p525.pdf
Deduction for costs involved in unlawful discrimination suits. You may be able to deduct attorney fees and court costs paid to recover a judgment or settlement for a claim of unlawful discrimination under various provisions of federal, state, and local law listed in Internal Revenue Code section 62(e), a claim against the United States government, or a claim under section 1862(b)(3)(A) of the Social Security Act. You can claim this deduction as an adjustment to income on Form 1040, line 36.
Let me know if you need any help.

Customer:

Thank you very much. I look over the publication that you sited in your answer. Your assistance is greatly appreciated.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,162
Experience: Taxes, Immigration, Labor Relations
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