Parking Tickets

[theresa d]

are parking tickets paid by a business deductible?

[sandysea]

Nope...

They are penalties and not deductible

[Zee]

Depending on the business type, wouldn't the tickets also be income to the recipient of the benefit?

[jainen]

Interesting point

>>income to the recipient of the benefit?<<

Interesting point, Zee. As you know, I'm not the most tactful guy around here. Do you have any suggestions for how to tell the client that I'm going to make him pay income tax on his parking tickets?

[Zee]

>>income to the recipient of the benefit?<<

Interesting point, Zee. As you know, I'm not the most tactful guy around here. Do you have any suggestions for how to tell the client that I'm going to make him pay income tax on his parking tickets?

Sure. How about this? "Parking tickets paid on your behalf by your employer/or company are taxable income." (unless of course, that's incorrect).

[jainen]

ha-ha-ha!

Thanks. I was just going to say, "It's the same as when they repo'd your other car last year--that cost you big bucks on the tax return too, ha-ha-ha!"

[ChEAr$]

Never thought about it before, but

Sure. How about this? "Parking tickets paid on your behalf by your employer/or company are taxable income." (unless of course, that's incorrect).

I think you're right there, Zee.

Now, for a schedule c or partnership, no problem about income; just a distribution to
owner.

C corporation, it's a dividend, reportable as such and therefore taxable to shareholder.
If not a shareholder, but an employee, I think a 1099-misc would be in order, but as
"other", and not block 7.

S corporation shareholder, it's a distribution and affects basis.

For an LLC member..... oh... "it depends." (grin

[erchess]

This was hillarious and I am glad I read it but

the original question was whether there are any circumstances under which any entity may claim a tax write off for parking tickets. I have always been told that the answer is "Financial penalties for breaking the law are never tax deductible" but I have never seen that in writing other than in old copies of Pub 17.

I would like for Sandysea or someone who concurs to cite a relevant page of the Code, the Tax Book, the RIA Handbook, or any IRS Publication.

[thomtax]

I have always been told that the answer is "Financial penalties for breaking the law are never tax deductible" but I have never seen that in writing other than in old copies of Pub 17.

I would like for Sandysea or someone who concurs to cite a relevant page of the Code, the Tax Book, the RIA Handbook, or any IRS Publication.

This mirrors my understanding, but am in the same situation. I would appreciate seeing something so that I can support my position with clients.

Thanks,
LT

[gkaiseril]

TITLE 26 > Subtitle A > CHAPTER 1 > Subchapter B > PART VI > § 162 Prev | Next

§ 162. Trade or business expenses


(a) In general
There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including—
(1) a reasonable allowance for salaries or other compensation for personal services actually rendered;
(2) traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and
(3) rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.

(f) Fines and penalties
No deduction shall be allowed under subsection (a) for any fine or similar penalty paid to a government for the violation of any law.

http://www.law.cornell.edu/uscode/search/display.html?terms=fines&url=/uscode/html/uscode26/usc_sec_26_00000162----000-.html

[jainen]

typical parking ticket

>>any fine or similar penalty paid to a government for the violation of any law<<

I'm not admitting that I have an especially acute knowledge of the subject, but the typical parking ticket is not a fine for violating the law. First of all, it's charged to the owner of the car without a shred of evidence that he or she was even involved. And no evidence ever is presented. You post and forfeit bail as an administrative process. You are considered innocent until proven guilty, and you can't be fined if you are considered innocent.

Most of the ticket is fees anyway, not even potential fines. Why shouldn't a business deduct such fees, just as it deducts its license? Obviously you can't conduct business with a tire lock on your car.

[gkaiseril]

Where I live parking tickets are a violation of very specific municipal ordinance, law, and are fines, further if you do not pay the fine a judge in a court find you guilty in absencia and attaches additional fines and penalties. A plice officer signs the citation and will appear in court to testify under oath about the violation. The car owner is allowed to appear in court and present evidence to a judge that the citaion is in error and that he/she should not be fined.

What ever you want to call the payment is not important, what is important is the violaton of the local law or governmental unit code.

Of course, you do what ever you want. I just tried to post an appropriate portion of the code explaining why you can not deduct fines and penalties.

[jainen]

keep your car

>>if you do not pay the fine a judge in a court find you guilty in absencia<<

But suppose you DO pay it. Are you ever indicted or formally charged? Does the district attorney, who has the burden of proof, ever submit any evidence? Does the judge make a finding of fact as to your guilt, and impose a penalty? If the answer to any of those questions is not a clear "yes," then our entire government (including the IRS) is constitutionally constrained to treat you as if you are innocent. Therefore your payment is not because you broke the law. It's for a perfectly necessary business reason--because you need to keep your car.

[gkaiseril]

You pleaded guilty to the offense and agree that you violated the law and will pay the penaltyeven if you were innocent. I have seen 4 people charged with possesion of a suspected illeagal drug. One pleaded guilty and went to jail The other 3 pleaqded not guilty and were found not guilty since the material was not an illeagal drug. The individual who pleaded guilty was not released nor was he pardoned and still carries the federal felony charge on his record.

[erchess]

the site

I tried to get to the site where you got your info (cornel law) and could not. Is it a free site to which I may go? Do you know of any free way for me to have access to the US Tax Code?