Deductibility of Back Wages Paid to Lawyer as Contingent Fee

November 18, 1958 BIR RULING NO. 680-58 Mr. Ponciano L. Melo Imus, Cavite S i r : In reply to your letter of November 10, 1958, requesting opinion as to whether or not the amount equivalent to 20% of the total back wages paid to your lawyer as contingent fee for the successful defense of your case in the Court of Industrial Relations is a deductible expense from your gross income, I have the honor to inform you that the aforesaid fee is a deductible expense pursuant to Section 30(a)(1) of the National Internal Revenue Code, provided it is necessary in recovering your back wages and actually paid during the year. The total back wages paid to you in April, 1958 should be reported in your income tax return for the same year which should be filed on or before March 1, 1959. Very truly yours, (SGD.) MELECIO R. DOMINGO Acting Commissioner of Internal Revenue