Tax Court denies above-the-line deduction for credit reporting legal fees

The Tax Court held that legal fees from a Fair Credit Reporting Act settlement do not qualify for the above-the-line deduction in section 62(a)(20), analyzed by Ed Zollars at Current Federal Tax Developments. The case is Eiler v. Commissioner, 167 T.C. No. 3, decided July 14. Judge Guider wrote the opinion. The Eilers settled claims against four credit reporting agencies for $64,750. After allocation they kept $4,700 and three law firms kept $60,050. They reported $4,900 of income. The IRS determined a deficiency of $11,423. The court applied the anticipatory assignment of income doctrine to include the full settlement, and read the civil rights language in section 62(e)(18) to exclude credit reporting accuracy claims. No public URL for the opinion could be verified, so no primary document is linked here.