Tax Court: Legal Fees Not Deductible for Conduct of S Corp. Sole Shareholder

The Tax Court has denied the deductibility of legal fees incurred to defend a wrongful death suit brought against the sole shareholder of an S Corp. Authored by Judge Holmes in inimitable style, the opinion offers a good discussion of the various instances when a corporation can, and cannot, deduct legal fees incurred on behalf of its employees.

Read the opinion here:
Cavanaugh v. Commissioner, T.C. Memo. 2012-324