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Sports And Entertainment Figures (And Others) May Be Able To Deduct Legal Expenses For Criminal Prosecutions (And Wrongful Death Suits), John R. Dorocak
Sports And Entertainment Figures (And Others) May Be Able To Deduct Legal Expenses For Criminal Prosecutions (And Wrongful Death Suits), John R. Dorocak
Akron Tax Journal
This article, first, explains the Gilmore origin of claim test. Secondly, the extension of the origin of claim to situations where the legal claim is less clearly connected to the taxpayer's business or income-seeking activities will be discussed. Thirdly, this article will analyze the issue of how a criminal prosecution, particularly for a murder in a situation such as Mr. Simpson's, can be connected to business or income-seeking. Fourthly, the issue of whether any government policy would prevent the deduction, especially for an unsuccessful criminal defendant, will be reviewed Fifthly, prior murder cases in which the defendant was not allowed …
The Origin Of The Claim Test: A Search For Objectivity, Edward J. Schnee, Nancy J. Stara
The Origin Of The Claim Test: A Search For Objectivity, Edward J. Schnee, Nancy J. Stara
Akron Tax Journal
Recently, the Ninth Circuit Court of Appeals, in United States v. Kroy (Europe) Ltd., used the origin of the claim test to determine the deductibility of financing expenses. At approximately the same time, the Tax Court, in Fort Howard Corp. v. Commissioner, concluded the use of the origin of the claim test to characterize similar expenditures was inappropriate. Given this conflict and the extensive use of this test to evaluate the deductibility of expenditures, this article reviews the development of this test and provides an analysis of the potential conflicts and uncertainties in its application.