Would UDC adjustments to income for legal fees apply to overtime claims for back pay?

7 replies
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Legal fees as an adjustment to income for back pay claims.

Lacerte Tax

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BobKammanAnswer

Level 15

Under IRC Section 62(e)(18), unlawful discrimination is defined to include: “any provision of Federal, State, or local law, or common law claims permitted under Federal, State, or local law… regulating any aspect of the employment relationship, including claims for wages, compensation, or benefits, or prohibiting the discharge of an employee, the discrimination against an employee, or any other form of retaliation or reprisal against an employee for asserting rights or taking other actions permitted by law.”

sjrcpa

Level 15

What sort of discrimination was at play?

The more I know the more I don’t know.

BobKammanAnswer

Level 15

Under IRC Section 62(e)(18), unlawful discrimination is defined to include: “any provision of Federal, State, or local law, or common law claims permitted under Federal, State, or local law… regulating any aspect of the employment relationship, including claims for wages, compensation, or benefits, or prohibiting the discharge of an employee, the discrimination against an employee, or any other form of retaliation or reprisal against an employee for asserting rights or taking other actions permitted by law.”

S

Shinault KokondokaAuthor

Level 2

Thanks BobKamman, I agree with your answer, I am having a hard time convincing my business partners that the legal fees can be deducted as an adjustment against income since they believe the overtime claim is not discrimination. It is kind of interesting that the company issued the 1099 to our client for the legal fees they paid directly to the attorney. Once again thank you.

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