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Submitted By: someone
Answered: December 9, 2020 10:33 pm
Answered: December 9, 2020 10:33 pm
I overpaid my taxes and the IRS denied my refund claim. I want to take the government to court to get my money back (I believe I’m in the right). Can I deduct my legal fees for pursuing this case?
Legal fees related to seeking a refund of individual income taxes normally would be deductible as a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income floor. However, this deduction is suspended for 2018 through 2025. Win or lose, legal fees related to business taxes (but not personal taxes on business income) may be a deductible business expense.
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Tax Glossary
Itemized deductions
Items, such as interest, state and local income and sales taxes, charitable contributions, and medical deductions, claimed on Schedule A of Form 1040. Itemized deductions are subtracted from adjusted gross income to arrive at taxable income. The amount of itemized deductions is also subject to a reduction when adjusted gross income exceeds certain limits.
