do you encourage business gifts & meals?

[tacks86]

Years ago i went to a seminar on tax savings with Stacey Botkin, formerly an attorney for the IRS. He basically said that IRS doesn't require much to have your dinner bill deemed a legitimate business meal -- 50% deductible.

You want to talk to your Dad about your business so you take him out to eat. Keep a record of the person you had the business meeting with, the business purpose and the date. "You don't even need a receipt."

I would imagine an IRS agent might disallow these expenses under audit-- especially with no receipt. [and at that point it wouldn't be worth appealing or going to court over-- i'm not familiar with this process whether expense is legitimate, bogus, material, or whatever]

Do you encourage the deduction of business meals? I certainly don't mean do you encourage your clients to be stupid and greedy.

After some questions, i discovered that a bricklayer would regularly eat out with Bob-- a landscaper. Two contractors often working for the same clients discussing thier schedule C businesses over dinner. I deduct the 50% allowable.

Do you ever inquire about this?

(i also deduct the bottle of whiskey that the bricklayer gave to bob)

[BOB W]

I .........

......... generally don't encourage nor take those deduction. I feel that most businesses do not document this type of expense properly. Besides, a bricklayer probably doesn't report all of his income and such an expense is a potential flag anyway.

[tacks86]

Thanks very much Bob,
I suppose you can't really expect the average Joe to keep honest records of such expense. And i certainly imagine that it could be a flag if it's exhorbitant.

Perhaps it's something i'll do for one or two people who aren't in cash businesses (the guy i'm thinking of isn't really a bricklayer).

And i'm really not talking about a material amount-- not enough to warrant attention from the IRS, in my humble opinion.

[ChEAr$]

whiskey

Years ago i went to a seminar on tax savings with Stacey Botkin, formerly an attorney for the IRS. He basically said that IRS doesn't require much to have your dinner bill deemed a legitimate business meal -- 50% deductible.

You want to talk to your Dad about your business so you take him out to eat. Keep a record of the person you had the business meeting with, the business purpose and the date. "You don't even need a receipt."

I would imagine an IRS agent might disallow these expenses under audit-- especially with no receipt. [and at that point it wouldn't be worth appealing or going to court over-- i'm not familiar with this process whether expense is legitimate, bogus, material, or whatever]

Do you encourage the deduction of business meals? I certainly don't mean do you encourage your clients to be stupid and greedy.

After some questions, i discovered that a bricklayer would regularly eat out with Bob-- a landscaper. Two contractors often working for the same clients discussing thier schedule C businesses over dinner. I deduct the 50% allowable.

Do you ever inquire about this?

(i also deduct the bottle of whiskey that the bricklayer gave to bob)

Cheap whiskey i assume. Remember the 25$ gift ceiling.

[tacks86]

deducting whiskey

Cheap whiskey i assume. Remember the 25$ gift ceiling.

Thanks, ChEA,

Yes i'm remembering the 25 dollar ceiling, per person, per gift. And given the records that this guy keeps some would say that i could be a lot more aggressive.

This small deduction is merely a safe way for me to demonstrate to my client that i've considered every deduction possible.

[Call me unsophisticated, but I'll admit to liking several whiskey that cost less thant 25 dollars-- 'inexpensive' but not 'cheap' -- bourbons, Irish, Canadians, etc. But I can't say there have been many the high-end single malts to include them in my taste test.]

[ChEAr$]

on the subject

[Call me unsophisticated, but I'll admit to liking several whiskey that cost less thant 25 dollars-- 'inexpensive' but not 'cheap' -- bourbons, Irish, Canadians, etc. But I can't say there have been many the high-end single malts to include them in my taste test.]

Then when you/we finish this tax season, and we will!, find a good store and buy yourself
a bottle of Dalwhinnie. It's a premium Scotch and maybe a one time deal, but........
after three and a half months of intensive work, doing the very best for our clients, and
being justly rewarded for caring for our clients, we deserve only the best.

(Just don't buy Glenlivet or Chivas Regal; they're owned by the french)

[oceanlovin'ea]

Sandy Botkin

I have heard lectures by Sandy Botkin. I also have a set of tapes that he made.I think he is a CPA, lawyer and has trained IRS auditors. He also has a website, www.taxreductioninstitute.com

He is very clear about having to have receipts to back up all deductions. He says to write on the BACK of the receipt who you took to lunch, purpose of the lunch, date, etc.

He is also very strict about keeping your mileage records. He has some books that you can use to keep track of these kind of expenses. He says that if you go into an audit and have his record book, the auditors will accept your records because he is very thorough.

Look at his website. He has some very good information and encourages all legitimate deductions. But he does stress keeping receipts.

Linda F

[Zee]

Sandy Bodkin Tapes Books

I agree. I also purchased a set of Botkin's tapes on ebay for a nominal amount. I wouldn't say there is anything in the tapes that experienced preparer's don't already know. But, they are well done and he does indeed stress documentation of all business expenses. I don't think he "pushes the envelope" too much, maybe on a few things...For example, (like others) he indicates your office in the home can be a corner with a desk...maybe, but I wouldn't want to face an auditor with that argument.
But, overall I found his tapes/books quite good, especially the section on the benefits/negatives of various entity choices.

[Skate1968]

Thanks to everyone who posted in this thread.

...For example, (like others) he indicates your office in the home can be a corner with a desk...maybe, but I wouldn't want to face an auditor with that argument.

I know of an experienced accountant, former boss, who used to take that kind of postition. If an entire office is not used 'exclusively for business' a corner of an office might be deemed exclusively for business. The corner where records, files, & documents are kept.

I wondered if he ever argued that position while under audit. Anyway it doesn't sound as though a corner of an office would be an overly large deduction that would raise an agent's eyebrows.

[tacks86]

Ooops

Thats Sandy Botkin, not Stacey.

[Zee]

Tax Court

Thanks to everyone who posted in this thread.



I know of an experienced accountant, former boss, who used to take that kind of postition. If an entire office is not used 'exclusively for business' a corner of an office might be deemed exclusively for business. The corner where records, files, & documents are kept.

I wondered if he ever argued that position while under audit. Anyway it doesn't sound as though a corner of an office would be an overly large deduction that would raise an agent's eyebrows.

I understand the argument, but the real test is whether this position will stand up to audit and the tax court. I wonder if there's been a tax court case supporting this position?