joanmcq Posted October 31, 2007 Report Share Posted October 31, 2007 I asked this on another board, but got no answers, so maybe someone has an opinion, I hope? I know the attorney fees, etc to obtain an H1-B visa are not deductible employee biz expenses, but what about fees to transfer an existing visa from one company to another? Client got married and moved to be with husband and had to move from Bay Area to LA, and get a new job. Could the fees be considered job search and not fees to enter a profession? Quote Link to comment Share on other sites More sharing options...
Pacun Posted October 31, 2007 Report Share Posted October 31, 2007 A similar question came in one of my H&R classes and the instructor said he would claim all expenses (including attorney fees) limited to the 2% floor. While I don't have a clear answer... I would like to create some reaction about this and you can make your decision. American companies would deduct any license fees needed to legally operate their business. A foreign company, not only needs the same licenses but it also needs a special license to operate legally. Would you deduct those expenses? I think so. An american baber will need a get a license to operate legally and YOU would deduct the licenses fees. A foreign barber will need two licenses, one regarding his profession and the other (H1B) to comply with the law. I am all ears. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted October 31, 2007 Author Report Share Posted October 31, 2007 The employer is by law supposed to pay all H1-B attorney fees associated with the preparation and filing of the petition, unless the employee's wage rate less the expenses is still higher than the required wage rate. The employee may be required to pay translation and visa fees. I'm not sure if this case is different because the fees are for the transfer, and not for the initial filing for the visa. Quote Link to comment Share on other sites More sharing options...
Pacun Posted November 1, 2007 Report Share Posted November 1, 2007 You are right and believe me, companies deduct whatever they pay for the H1B process including, but not limited to, attorney fees. Prior to 1999, employees had to pay for the H1B process, I believe most preparers didn’t deduct those expenses on the employee’s tax return but now no one questions (not even the IRS) when a company deducts all expenses. I did not want to mention that the employer is the one who pays for the H1B because it is only one of many ways to work legally here in the USA. TPS beneficiaries, for example, are paying at least $400 to renew their work authorization. I believe that if the IRS does not allow those deductions, the courts will. I do not claim them on schedule A because usually the expense is little and I do not want to be the one that challenges the IRS in court. The rule is that if a company wants to employ someone with H1B, the employer has to pay for the H1B visa. I believe a transfer is the same. If not, the new company is not following the rules or found a loopo. Most of the time, employee and employer make agreements and most of this money comes from the employee either through less benefits or more hours of work. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted November 1, 2007 Author Report Share Posted November 1, 2007 well, the client is saying, well, his wife and the employer 'came to an agreement' which if she wanted the job, she had to pay the attorney fees. And since she needed the job, he's like, 'what do you do?'. But since they are under audit, I'm wondering if the IRS will accept the deduction for the attorney fees as employee business expenses or if they are SOL. Quote Link to comment Share on other sites More sharing options...
Pacun Posted November 1, 2007 Report Share Posted November 1, 2007 Nothing is deductible then. If the company is the one that is supposed to pay and they voluntereed to pay, nothing is deductible. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted November 1, 2007 Report Share Posted November 1, 2007 A similar question came in one of my H&R classes and the instructor said he would claim all expenses (including attorney fees) limited to the 2% floor. While I don't have a clear answer... I would like to create some reaction about this and you can make your decision. American companies would deduct any license fees needed to legally operate their business. A foreign company, not only needs the same licenses but it also needs a special license to operate legally. Would you deduct those expenses? I think so. An american baber will need a get a license to operate legally and YOU would deduct the licenses fees. A foreign barber will need two licenses, one regarding his profession and the other (H1B) to comply with the law. I am all ears. I like your argument, but I don't think it flies (unresearched - just talking out my butt here). Let me give you another example. I have to go to London on business. I need a passport and a plane ticket. The ticket is deductible. I don't think the passport is. I think the same reasoning applies to the Visa. It only allows you to enter the country, it is not part of the job you are working at (even though it is required). Using your logic, I can deduct the cost of my drivers license if I deliver Dominos Pizza because I have to have that license to drive their vehicles. I don't believe that works, because the drivers license is not specific to that job, even though required. Again, I am just discussing, and I don't have time to research this, so you are free to rip me if I am wrong. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
Pacun Posted November 1, 2007 Report Share Posted November 1, 2007 I like your argument, but I don't think it flies (unresearched - just talking out my butt here). Let me give you another example. I have to go to London on business. I need a passport and a plane ticket. The ticket is deductible. I don't think the passport is. I think the same reasoning applies to the Visa. It only allows you to enter the country, it is not part of the job you are working at (even though it is required). Using your logic, I can deduct the cost of my drivers license if I deliver Dominos Pizza because I have to have that license to drive their vehicles. I don't believe that works, because the drivers license is not specific to that job, even though required. Again, I am just discussing, and I don't have time to research this, so you are free to rip me if I am wrong. Tom Lodi, CA The law does not require you to have a driver's license to deliver the pizza. You can use pony express, a scooter or simply walk. But now, you have broght a good argument... If you make a business trip to El Salvador, you will need a plane ticket ($500), a Visa at the airport ($10), hotel ($80 daily) and food ($30 daily). Do you think the traveler or the company he works for will deduct the $10 they paid for the Visa? No one knows the exact answer and we appreciate your input. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted November 1, 2007 Author Report Share Posted November 1, 2007 See, though, the H1-B visa is job specific. The fees were to transfer it from her employer in Sunnyvale (near San Jose) to a new employer in LA. Because she agreed to pay, I'm thinking non deductible even though the arrangement was illegal. But then I think that because it was a transfer, and not the initial H1-B maybe I've got a chance. Quote Link to comment Share on other sites More sharing options...
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