Discussion:Legal Fees-DUI Defense
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| {{ForumReplyPost|UserID=Death&Taxes|Date=16 July 2009|Text=Or a Breathalyzer salesman?}} | {{ForumReplyPost|UserID=Death&Taxes|Date=16 July 2009|Text=Or a Breathalyzer salesman?}} | ||
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| + | {{ForumReplyPost|UserID=TTMM|Date=16 July 2009|Text=I know I'm showing my age with this statement, but.... | ||
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| + | There was an episode of WKRP where Venus and Johnny drink on the air and show how their reflexes decreased the more they drank. | ||
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| + | So if Venus or Johnny drove after the program and got a DUI, wouldn't that be related to their employment with the station? | ||
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| + | Just thinking out loud.}} | ||
Revision as of 23:09, 16 July 2009
Discussion Forum Index --> Basic Tax Questions --> Legal Fees-DUI Defense
Discussion Forum Index --> Tax Questions --> Legal Fees-DUI Defense
| 15 July 2009 | |
| A client was arrested for DUI. His defense attorney told him that the legal fees for his DUI defense should be deductible
since he is attempting to protect his driving privileges which are necessary for his employment. I have never heard of such a thing. He is a businessman, not a truck driver. Has anyone ever claimed such a deduction? | |
Death&Taxes (talk|edits) said: | 15 July 2009 |
| Oh, I am sure someone has claimed it and maybe gotten away with it, but that doesn't make it legal. | |
| July 15, 2009 | |
| Tell the defense attorney to stick with legal advise....in other words, NOPE - not deductible. | |
Ksnoopytax (talk|edits) said: | 15 July 2009 |
| The attorney is incorrect. Individuals can generally deduct legal expenses incurred in attempting to produce or collect taxable income. If a driver's license is suspended for driving while intoxicated, the cost of fighting the suspension is not deductible even if the license is needed for the job. The suspension is considered a personal, non income-producing activity. | |
| 15 July 2009 | |
| but do tell your client about the new credit for riding a bicycle to work | |
Michaelstar (talk|edits) said: | 15 July 2009 |
| It amazes me how many times I have heard that an attorney has told their client that their legal fees are deductible when those fees are absolutely not deducible except from the checking account balance. That kind of advise more sounds like coming from the cocktail circuit when he said she said - that everything you spend is deductible! Yes it is - from the checking account!
Unfortunately, we as tax professionals are always having to bring our tax clients back to reality with the "bad news" and having to justify ourselves as to why these legal fees are not deductible for "tax" purposes. | |
Southparkcpa (talk|edits) said: | 15 July 2009 |
| What if he gets a DUI on his bicycle? | |
| 15 July 2009 | |
| Yet another example of the lawyer with no concept of tax law.
It IS possible to get a DUI on a bicycle in some states, or so I've been told. In others, you can get a DUI if you are riding a horse whilst intoxicated. (You, not the horse.)In NM, DUI is possible on a snowmobile or in a motorboat. I've yet to see DUI on a pogostick but I'm sure it's only a matter of time. | |
| 16 July 2009 | |
| A non-tax lawyer who doesn't advise his clients to seek the advice of a tax-professional such as an EA or CPA is a fool and had better have his liability insurance paid up. Also good luck defending against any Bar discipline. | |
| 16 July 2009 | |
| Agreed. But you'd be amazed how many lawyers don't refer out because they don't even know that there MIGHT be tax consequences! | |
| 16 July 2009 | |
| I've sent them over to the CPA's and EA's, and most of the time, they find these professionals hopped up on medical marijuana or worse (Cocoa Puffs). I had a client walk in on an older EA last week who was eating morning glory seeds out of his hat and reciting portions of the Karma Sutra while wearing a skirt he had knitted himself in the style referred to as "macrame". He had the nerve to proceed to flash my client a "squirrel" before she hid herself in a broom closet until after closing time, when she finally escaped.
I have taken the position that a DUI is deductible for the businessman under either of these circumstances: A) if he got drunk with one of his customers while discussing business (today, this means discussing bankruptcy strategy), and as long as he only takes 50% of the amount of his drinks as a deduction, OR B) 100% of the cost of the DUI is deductible if you have a magnetic sign on your car with your business name on it, and you throw up on it before being arrested. If you think I'm wrong about this, cite your code section, Regs., and all relavant cases in your defense. I think we should get off the backs of these lawyers who are carrying the weight of the world on their shoulders right now, and concentrate on throwing all these EA's and CPA's in jail for the illegal practice of law which they seem to do every day without having a clue. I am authorized to state that the local chapters of the Daughters of the American Revolt and the Puerto Rican Legal Defense Squad are in unanimous agreement with my position on this subject, besides all the friends I have coffee with each morning at McDonalds. | |
| 16 July 2009 | |
| I agree with Crow. I see no problem with deducting the attorney fees if the DUI incident occurred while the client was making a sales call or entertaining a customer. | |
| 16 July 2009 | |
| However, if I were king of the world, I would make sure that the attorney fees would be nondeductible if the client were convicted. | |
| 16 July 2009 | |
| The fees would be deductible if drunk driving was a normal job requirement. If someone can find such a job, please report back. | |
| 16 July 2009 | |
| But just as long as the fees were paid. BMW payments aren't cheap. | |
Death&Taxes (talk|edits) said: | 16 July 2009 |
| We could create a list of quasi-tax advisors in addition to lawyers. Used to be you'd hear these things down at the barber shop but not today
1. Real estate sales people who tell clients 'all those settlement costs of buying your house are deductible,' Anyone want to take on insurance men? Or brother-in-laws? | |
| 16 July 2009 | |
| CrowJD - You're definitely on a roll. Do you have to work hard on your posts, or do they just spill out of your brain onto the page?
Riley2 - Many participants in this forum would argue that you are, in fact, king of the world. | |
| 16 July 2009 | |
| Smokey, it's the questions themselves that set me off. I would never have thought in a million years to write off a DUI, and the whole idea struck me as funny. | |
Michaelstar (talk|edits) said: | 16 July 2009 |
| All right - I researched this last night for a while and could find no court cases on someone who deducted legal fees for tax purposes in defending a DUI.
While I drink with the best of them at times, I follow the DD rule or taxi rules - I am in just total disagreement. Unfortunately, unless someone can come up with something more specific on this, I am going to have to break from Riley2's first post on this subject and disagree with his siding with Crow. Certainly fully agree with Riley2's second post. There is no way under the sun that you can convince me that under rain, hell or high water that legal fees defending a DUI case can be classified as an ordinary and necessary business expense. It is totally unnecessary that someone needs to become inebriated while performing their job as a sales man or anything else. It is not even ordinary and necessary for one who tastes alcohol for a living to be operating a vehicle in public while drunk. How many of you know someone who has been killed by a drunk driver - and your going to tell me that if they were "working" they can take a legitimate tax deduction for defending themselves! Not a chance in hell. | |
| July 16, 2009 | |
| With all deference to our incoming Supreme...this is one where your gut does get you to the answer even if the law doesn't. Tho' she claims otherwise. Right. | |
| 16 July 2009 | |
| I wonder...suppose I ran an insurance company that sold legal insurance group plans to employers for their employees. One benefit is DUI defense. (At least, it is in the plan I pay for.) Assume that the employer pays the entire plan premium.
So a covered individual gets his lawyer free through the plan. Surely my insurance company can deduct the cost of providing the defense lawyer, right? And the employer could deduct the cost of providing the insurance coverage as an employee benefit, right? Or not? (I THINK that the employee would have to include the value of the employer-paid plan premium in his W-2 income. I am unaware of any exemption for legal insurance like there is for life or medical.) | |
| 16 July 2009 | |
| There does not have to be a court case, just a NEW case. That's how law get's made.
It's called common law...courts have always made law under our system (please tell Lindsey Graham for me), which we got from England.** Though it's true that there is no federal common law (strictly speaking), the courts can do amazing things with these federal statutes if called upon to do so, and if you give them something to hang their hat on. And, that's as it should be because it's impossible for a legislature to forsee every possible application that a wiley EA or CPA can torture the law with! .**members of the Elephant party, if you don't believe me, study the definitions for common law. | |
| 16 July 2009 | |
| I think Michaelstar is right on.
Suppose I murder someone at work (there's that perfume wearer in the next cubicle over) and will lose my job if I get convicted? Does that make the attorney fees deductible? | |
| 16 July 2009 | |
| Fines and penalties paid to a governmental agency are non-deductible. Therefore, under the "Origin-of-the-claims" test it would follow that the attorney's fees are non-deductible. | |
| July 16, 2009 | |
| I wonder if I'm in alcohol sales if I'd have a case? (Geez, am I starting to think like Crow? No, reality check...I'm ok.) | |
Death&Taxes (talk|edits) said: | 16 July 2009 |
| Or a Breathalyzer salesman? | |
| 16 July 2009 | |
| I know I'm showing my age with this statement, but....
There was an episode of WKRP where Venus and Johnny drink on the air and show how their reflexes decreased the more they drank. So if Venus or Johnny drove after the program and got a DUI, wouldn't that be related to their employment with the station? Just thinking out loud. | |


