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.

advertisement
Tax Glossary

Material participation tests

Rules for determining whether a person is active in a business activity for passive activity rule purposes. Unless the tests are met, passive loss limits apply.

More terms