Maintenance: Tax deductibility of lawyers and court costs

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FG Münster qualified with its judgment of 03.12.2019 (file number: 1 K 494/18) Lawyer and court costs for the dependent's claim for his maintenance as tax-deductible advertising costs (in contrast to Section 33 EStG).

In its judgment of 03.12.2019, the FG Münster (file number: 1 K 494/18) deals with a frequently occurring question, the tax deductibility of attorney and court fees.

In order to understand the decision (also in the context of any other articles on the Internet), first the following chronological arrangement:

In 2011, the Federal Fiscal Court (BFH) fundamentally changed its case law on the deductibility of attorney and court fees and affirmed that these costs were deductible in almost every case. In 2013, the legislator then amended the law. Since then, the Federal Fiscal Court has no longer been able to maintain its taxpayer-friendly case law and recognizes that attorneys' and court fees are deductible only under the very strict (or almost never existing) conditions of Section 33 EStG on.

For the specific case of attorneys' and court costs for maintenance proceedings involving the dependent Has the FG Münster decided that these costs can be deducted from tax as advertising costs if the limited real splitting (maintenance is taxed by the person liable for maintenance) is carried out.

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The details:

The court bases its decision on the fact that it meets the strict requirements of Section 33 EStG does not have to check because lawyer and court costs are advertising costs within the meaning of Section 33 (2) S 2 EStG.

According to the legal definition, advertising costs are Section 9 EStG: Expenses to acquire, secure and maintain income. Advertising costs must be differentiated from costs of private living Section 12 No. 1 p. 2 EStG. Whether expenses are attributable to employment or lifestyle within the meaning of Section 12 No. 1 S. 2 EStG is decided in accordance with the case law, taking into account all the circumstances of the individual case. The decisive factor is what is seen as the starting point for determining the subject matter of the proceedings.

The FG then concludes that as a result of real splitting and the legislative decision to equate maintenance via real splitting with other income, maintenance must be treated in the same way as all other income. However, according to the court, such equal treatment, since both the trigger and the aim of the court proceedings were to obtain maintenance payments, one must assume that the costs are attributed to the sphere of employment and therefore deductibility as advertising costs.

The revision was approved by the FG. It remains to be seen whether the tax offices will follow the FG's decision.

Conclusion:

The decision of the FG is well founded in law.

Until final clarification, attorney and court costs with the dependent should therefore be stated as advertising costs in the tax return and an appeal should be filed against tax assessments that do not recognize the attorneys' and court costs as advertising costs.