ESPECIALLY WORKPLACE DISCRIMINATION SUITS.

Ref: Internal Revenue Code Sec 62(e) and Publication 525. 

Also see: Abraham J George v Commissioner, TC Memo 2016-156 [Section C, “Deduction for Attorney’s Fees”]

Generally, attorneys fees are placed on the individual return as a miscellaneous itemized deduction. HOWEVER, in the case of the long list of civil rights violations in Sec 62(e) including age, race and disability discrimination suits, those costs are placed on the front of the return as a direct deduction against the lawsuit proceeds (not to exceed the taxable amount of the settlement). This is a significant benefit to the taxpayer. 

Please contact us if you have questions in this area.