Dog Grooming

[Gary]

I have a new client. His return was done by a CPA last year. There are a number of things she did wrong on the return, but my question concerns his Schedule C for dog sitting. The CPA took as an expense $1200 for dog grooming of their own personal dogs. The justification is that their dogs are part of the business and they interact with the dogs that they get paid to watch. I told him I didn't think the IRS would buy this if they ever got audited. Also, he says he has a cell phone that is used ONLY for business. I again feel uneasy about taking 100% of a cell phone. He does have a web site, so it is a legitimate business and he has kept very good records.

What would you do?

[DaveO]

The other dogs don't care if the resident dogs are well groomed. It's like the day care operator who wants to deduct pet expenses because the kids play with the pets. I'd say it's personal. As to the cell phone I'm doubtful of 100% business use as well. In my experience the IRS will accept most any allocation at face value, as long as one is made. If no allocation is made they will want records.

[taxea]

I agree with Dave. taxea

[David1980]

The other preparer may not have had all the facts as well. I can see him just getting a list of expenses for the dog business and having a line item on there "Grooming $1200". If he didn't ask the question of who's dog is getting groomed it could seem legitimate.

[erchess]

Hmmmmm

I would be more inclined to look at it this way. Are clients more likely to leave their dogs or their kids with someone whose dogs look tidy and have trimmed claws or someone whose dogs look untidy and have natural length claws?

I would either get a cite I don't currently have or do disclosure if I were going to claim this sort of thing but I would consider them carefully if I were satisfied that the expenses had actually been incurred and that the business was real

Of course I could make a similar argument for deducting nice clothes worn by the doggie or child day care operator when meeting parents or taking care of dogs or children. The only thing is we all know that there is a large body of statutory and case law on the subject of work clothes aka uniforms and the rules do not allow a deduction for most of the clothes Americans work in. I know of no similar body of rulings with respect to pet grooming. Perhaps someone can show me something I haven't seen. All I bring to this discussion is a broad awareness of the meaning of "ordinary and necessary".

[Roberts]

You do accounting for pay and roughly spend 4 hours per month handling your own accounting. Do you deduct 48 hours of work at your normal fee rate at the end of the year as a business accounting expense? After all, who would hire an accountant who didn't have their own books in perfect shape?

I'd question how they came up with the $1,200 expense. I could maybe understand a few dollars but most of the expenses are already being deducted.

[Kram BergGold]

Agree

Whether or not the groomin gis an allowable deduction unless they tool the dog somewhere else for grooming there is nothing to deduct.

As for the cell phone if my client insists it is 100% business then it is. I am not about to argue with them over it.