Submitted By: someone
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

Fiscal year

A 12-month period ending on the last day of any month other than December. Partnerships, S corporations, and personal service corporations are limited in their choice of fiscal years and face special restrictions.

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