Are legal fees to obtain employment related benefits (i.e. long-term disability benefits governed by ERISA) considered an above the line deduction regardless of the stage of the appeal (i.e. administrative appeal vs litigation)?
It is my understanding that the proper characterization of legal fees simply depends on the origin of the claim, and it doesn't matter if the contingency fees arose during the administrative appeal process or through litigation; however, I cannot find anything which supports that point of view.
My legal expenses are directly connected with recovery of employment-related benefits, and this appear to be an above the line deduction as per AJCA, Section 703 of H.R. 4520 and 26 USC 62(e)(18), butI am just uncertain if this tax code only pertains to litigation or also is applicable to legal fees incurred during the administrative appeals. Does anyone know and have a reference for this tax treatment of legal fees?
