Legal fees

[oceanlovin'ea]

New client came in today. He was involved in legal proceedings last year against ex-wife dealing with child abuse charges and he now has custody of his child.

Lawyer told him her fees were deductible. I told him I would check it out but I thought only legal fees regard to income producing were deductible.

Does someone know where I should look for more information? Ever had this come up before?

Thanks Linda

[Gretel]

The one thing that comes to mind is alimony. If he receives alimony maybe he can deduct legal fees? Going out on a limp here....

[Burke]

See TTB 4-26. Under Non-Deductible Legal Fees: Custody of children.

[erchess]

Client Relations

I would point out to him that you wouldn't have advised him on how to deal with the courts, his ex, and the children because that would have been outside of your expertise and that unless the lawyer is also a tax lawyer how to file taxes is outside of his or her expertise. You could also ask that he ask the lawyer if he or she or his or her firm does tax returns and if so what they would charge for preparation and for later audit assistance.

[oceanlovin'ea]

He can call lawyer

I will tell him to call the lawyer and ask her why she said her fees would be tax deductible. Then he will either come and say that wasn't what she said or we will find out her reasons.

Either way - unless she has some documentation... I won't be putting it on his tax return.

Linda