Frank and Barbara Biehl - Page 19

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          other section of the Code.  For an expense to qualify as being              
          paid under an accountable plan, it must be allowed as a deduction           
          under section 162(a).  Sec. 1.62-2(d), Income Tax Regs.                     
               Mr. Biehl’s attorney’s fee satisfies the threshold                     
          requirement of deductibility under section 162(a).  It is well              
          settled that the costs of a former employee’s prosecution of a              
          wrongful termination claim are deductible by him as a trade or              
          business expense under section 162(a).  McKay v. Commissioner,              
          102 T.C. 465, 489 (1994), vacated and remanded on another issue             
          84 F.3d 433 (5th Cir. 1996); Alexander v. Commissioner, T.C.                
          Memo. 1995-51, affd. 72 F.3d 938 (1st Cir. 1995).  Section 162(a)           
          allows a deduction for ordinary and necessary expenses incurred             
          in the course of carrying on a trade or business.  A taxpayer may           
          engage in the trade or business of “being an employee”.  O’Malley           
          v. Commissioner, 91 T.C. 352, 363-364 (1988).                               
               In McKay v. Commissioner, supra at 489, we concluded that a            
          former employee’s attorney’s fees in a suit against his former              
          employer were “incurred in the course of carrying on * * * [the             
          taxpayer’s] trade or business” as an employee.  Our conclusion              
          was based on the fact that the transaction subject to the                   
          litigation “arose in the context of the taxpayer’s trade or                 
          business”.  Id. at 488 n.23; see also Alexander v. Commissioner,            

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