Running a Cleveland business is tough. Running a Cleveland business while rooting for the ever-frustrating Cleveland sports teams is even tougher.
However, the Internal Revenue Service wants to make it even tougher for business owners inclined to deduct ticket costs as business expenses. The agency says it has a few boxes for entrepreneurs to check off before claiming those deductions.
First, Crain's Cleveland Business says, the company claiming the tickets as a deduction must be able to show that it conducted business at the sporting event. That means if your company purchased a couple of Browns tickets and simply gave them to a client, you can't legitimately claim the tickets as deductions. This would instead be a gift, with its own applicable rules.
Crain's notes that IRS examiners are strained when asked to believe that business deals are hammered out at games. Instead, they are more likely to believe that business took place at your office on the way to or from the game, or perhaps even during a stop at a watering hole or restaurant.
If you are conducting business in a luxury suite at a Cavs game or Indians game, you would do well to speak with a tax professional about whether or not the entire suite expense can be deducted.
If deductions appear to be for some reason illegitimate, they can trigger an IRS audit. For business owners facing an audit and the possibility of tough questions from IRS agents, it makes sense to sit down with an attorney who will examine every available option for favorable resolution of complex tax issues. In some cases, finding a favorable resolution will involve an appeal of IRS audit findings in U.S. Tax Court.
While an appeal is not a game, it’s an event every business owner wants to win.
Please see IRS Audits and Appeals for more information about the experienced, skilled tax attorneys at Robert J. Fedor, Esq., L.L.C.
