M&E for patients?

[Gretel]

Would you see any reason why a Chiropractor could deduct M&E for patients? What business would be discussed? Maybe a long term case? Maybe a appreciation gift limited to $25 a year?

Any thoughts are appreciated.

[JohnH]

His receipts should have the info you seek, since he's required to note the names of the patients entertained and the business nature of the discussions. Or maybe he is providing meals in conjunction with seminars explaining his specialty in hopes of gaining new patients and/or retaining existing patients.

[Lion]

Lawyers

Wooing lawyers to refer him their accident cases.

[Gretel]

Thanks. Well, I don't have any problems with biz partners or seminars but this is not the case. This is a new client for me and, in general I have explained the rules. This has been done wrong on prior tax returns since there is no was having $3,000 in Entertainment in this case.

Client is willing to learn and so am I and was looking for some guidance going forward.

[Gretel]

Ok, I have more details on the business.

Client takes out some patients for exposure (marketing purposes) and no business is discussed during such lunches. I am pretty sure that this is too much of a stretch and these expenses do not qualify as marketing expenses.

I guess if he would make this an official marketing event, advertised in the paper as something like "your hour with..." then it would be different.

However, I am not sure that such a meal couldn't qualify as a gift up to $25 for the patient's part only. Any thoughts?

[oceanlovin'ea]

My chiropractor had refreshments in his office as an appreciation day. We just happened to have an appointment that day. He does it once a year on the day he opened his business. He had very healthy snacks for us. He also didn't charge for his treatments on that day. We hit the jackpot.

Then I went to the dentist on Valentine's day and they gave each patient a long stemmed rose. Maybe that is because his name is Dr. Valentine.

Anyway not related to my work....I gave nothing in return.....didn't even have to pay anything on that day.

Linda, EA

[Burke]

Ok, I have more details on the business.
Client takes out some patients for exposure (marketing purposes) and no business is discussed during such lunches. I am pretty sure that this is too much of a stretch and these expenses do not qualify as marketing expenses.
I guess if he would make this an official marketing event, advertised in the paper as something like "your hour with..." then it would be different.
However, I am not sure that such a meal couldn't qualify as a gift up to $25 for the patient's part only. Any thoughts?

I do not believe it would fit the definition of business gifts, small items of less than $25 value, under IRC 274(b). After all, it definitely does not meet the requirement as meals expense since no business was discussed and if it somehow did, it would be limited to 50%. Reclassifying it as a gift for a full deduction of $25 seems shaky. Maybe if he gave them a gift certificate at the restaurant.....?????

[Gretel]

I do not believe it would fit the definition of business gifts, small items of less than $25 value, under IRC 274(b). After all, it definitely does not meet the requirement as meals expense since no business was discussed and if it somehow did, it would be limited to 50%. Reclassifying it as a gift for a full deduction of $25 seems shaky. Maybe if he gave them a gift certificate at the restaurant.....?????

This is how my train of thought went, ending with a gift certificate, which of course is not the intention. I will do some more research on what qualifies as a business gift. I am really not talking about $25, rather $10.

If one takes Entertainment expenses it includes the taxpayer's expense. If I find anything to support the deduction as a gift for patient's part only I probably will go that route.

Thanks everyone.

[Gretel]

No Gift

Just found this on the internet, which rings true with me. It's not an official reference but I am convinced now.

"Entertainment gifts. What happens if you give tickets to a play or sporting event to a customer or client? Is this a gift expense or an entertainment expense ? The general rule is that any item that could be considered either a gift or an entertainment expense must be considered an entertainment expense. However, if you give the tickets and do not attend the even yourself, you have the choice of determining whether an item is either a gift or entertainment expense. If you go with the client, you must treat the cost of the tickets as an entertainment expense — you have no choice."

[JohnH]

The client needs to give the guests' backs a little "adjustment" while they're enjoying dessert. That might change the nature of the expense...

[taxea]

Ok, I have more details on the business.

Client takes out some patients for exposure (marketing purposes) and no business is discussed during such lunches. I am pretty sure that this is too much of a stretch and these expenses do not qualify as marketing expenses.

I guess if he would make this an official marketing event, advertised in the paper as something like "your hour with..." then it would be different.

However, I am not sure that such a meal couldn't qualify as a gift up to $25 for the patient's part only. Any thoughts?

If no business is discussed he isn't doing any marketing., Not deductible.