That is correct George. The tax deduction reduces your taxable income. It is not a dollar for dollar reduction of the tax...That is a tax credit not a tax deduction. The point I was trying to make is that the expenditure of attorney's fees is not a total loss when trying to collect delinquent accounts.In effect you are recovering the equivalent of a portion of the expenditure for attorney's fee through the deduction. Half a loaf is better than none.

There are also statutes in many states that provide for the recovery of attorney's fees in total. For instance in Connecticut we can sue for unfair trade practices in the sale or lease of goods and services as an alternative to a suit for contract breach. This statute provides for full recovery of attorney's fees if you win the suit. There are many ways to skin a cat.