There is a lawsuit going on which is not requesting damages nor is it a contingency lawsuit. The lawsuit is requesting that the defendant provide a benefit that was part of the agreement that the defendant did not deliver. The plaintiff, an individual, has been paying the lawyers am hourly fee which is paid monthly by invoice. The plaintiff is expected to prevail and it is also expected that the Judge will awarded legal fees to the Plaintiff, as it is very obvious the defendant intentionally deprived the plaintiff of the benefit to which they were entitled. The question is if the court orders reimbursement of legal expenses is the taxpayer (Plaintiff) liable to pay tax on the reimbursement of legal fees paid if the defendant issues a 1099-Misc for the expenses? The fees being reimbursed span several years.
It is also possible that the defendant might choose to settle before the trial by offer some type financial compensation instead of the benefit including reimbursement for legal fees. If this happens can the reimbursement piece deducted from the settlement since this is not a contingency case.
