Taxpayers often come to advisers seeking a way to claim a deduction for legal fees. As we are aware, the IRC doesn’t provide a provision that broadly allows a deduction for legal fees. Rather, taxpayers must find a provision in the IRC that allows a deduction for expenses of a type in which the current legal fees can be categorized.
The search for a provision under which to claim a deduction for legal fees was undertaken recently by the taxpayer in the case of Barry v. Commissioner, TC Memo 2017-237. In this case the taxpayer had incurred over $25,000 of legal fees in an unsuccessful attempt to recover what he claimed was alimony which he had paid to his wife in excess of what was allowed under their agreement.
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