Category: Litigation & Settlement Awards
How the IRS taxes litigation proceeds and settlement awards, including the rules that determine what is taxable and how attorney fees are treated.
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When Are Attorney’s Fees From a Settlement Deductible?
The employer-employee relationship can often lead to disputes. These disputes are often settled out of court. Whether it’s a wrongful termination claim, a defamation lawsuit, or other employment-related litigation, these settlements often involve significant attorney’s fees. The taxpayer receives a settlement check, but a substantial portion goes directly to their legal counsel under a contingency…