Ways to write off scuba trip as business expense?

[mdb]

dont underestimate the tax mans attention to detail- I kew a bricklayer who had an audit and had done some cash jobs - they broke it down month by month and showed him he didn't have enough to live on in a few months, he told them hed sold stuff through newspaper adverts. they asked him to come in for an interview at the tax dept and when he went in they had ALL the newspapers of those months spread out on tables and they asked him to point out his adverts

If you are in for the very small% of taxpayers that get tagged for a full audit you better have your s-it together.

They are there to take you down and that is their job and they like it,

 

[diving4ever]

Since this has veered into a discussion on audits, I want to share my experience FWIW. I believe people should feel free to take any deductions or credits they are entitled too without fear of being audited. Obviously the deduction should be defensible and documented.

I've been on the receiveing end of IRS audits as an individual and as the ranking officer of a tax exempt corporation. They are anxiety producing pains in the a**. Lots of work pulling together documentation and generating financial statements. But in all three of my experiences the IRS employees were helpful and polite. Perhaps it was because my audits were random and I was not being investigating for fraud. But in my case there was clearly no animosity. When they identified a deduction they felt I wasn't entitled to, they corrected my taxes and I had to pay the owed tax plus interest, but they didn't apply penalties. Since they were amending my return they even allowed me to increase my allowable deductions (some of which I hadn't initially taken hoping to avoid audit red flags). The only thing that was frustraing was when they requested some very complicated reports during the interview with no notice. When I called that out, they admited that they don't provide notice, because they want to see what the reports look like without the auditee having time to amend them.

I hope I don't ever have to go through one again, but it wasn't so painful that I'd avoid taking deductions I'm entitled too. That includes legitimate business or volunteer expenses.

 

[Schwob]

Since this has veered into a discussion on audits, I want to share my experience FWIW. I believe people should feel free to take any deductions or credits they are entitled too without fear of being audited. Obviously the deduction should be defensible and documented.

I've been on the receiveing end of IRS audits as an individual and as the ranking officer of a tax exempt corporation. They are anxiety producing pains in the a**. Lots of work pulling together documentation and generating financial statements. But in all three of my experiences the IRS employees were helpful and polite. Perhaps it was because my audits were random and I was not being investigating for fraud. But in my case there was clearly no animosity. When they identified a deduction they felt I wasn't entitled to, they corrected my taxes and I had to pay the owed tax plus interest, but they didn't apply penalties. Since they were amending my return they even allowed me to increase my allowable deductions (some of which I hadn't initially taken hoping to avoid audit red flags). The only thing that was frustraing was when they requested some very complicated reports during the interview with no notice. When I called that out, they admited that they don't provide notice, because they want to see what the reports look like without the auditee having time to amend them.

I hope I don't ever have to go through one again, but it wasn't so painful that I'd avoid taking deductions I'm entitled too. That includes legitimate business or volunteer expenses.

Makes sense. My wife's business was lucky so far in that regard, but she decided to not bother with claiming a home office, even so we have that a room aside for that and that is all it is used for... Just seems not worth it to "wave that red flag"...

 

[lermontov]

Makes sense. My wife's business was lucky so far in that regard, but she decided to not bother with claiming a home office, even so we have that a room aside for that and that is all it is used for... Just seems not worth it to "wave that red flag"...

Its a pretty standard claim and can be worthwhile. why don't you email the IRS and ask for a clarification then you can have some paperwork to back up your position if audited in the future. paperwork is everything

 

[Schwob]

Its a pretty standard claim and can be worthwhile. why don't you email the IRS and ask for a clarification then you can have some paperwork to back up your position if audited in the future. paperwork is everything

I probably would... but, her business, her reasoning, her call and that's how she called it... and I am totally fine with that... (and it's our home... I live there... and plan on continuing doing that...)

 

[KevinNM]

I believe you. But I'd be shocked if the IRS could care about skimming cash off of a sandwich shop. Maybe I'm naive. I was looking at buying a business the other day, so I was googling how much the average small business was worth. A mostly cash business was worth more than a retail store where credit cards were taken because of the amount you could skim. Maybe stealing from the government is big business. The defense contractors don't seem to have a problem with it.

My sister was a cocktail waitress in Vegas and worked in a job where they deducted her taxes. She changed positions and in the new position they did not. So she owed a thousand or so in taxes on her $20-30K/year job. IIRC, she ended up owing something like $10,000 to the IRS when they came after her, which was hard because she didn't have the money.

 

[WetPup]

Get a PhD in marine sciences.

Research trips are a business expense.

Go forth and dive.

 

[KevinNM]

Its a pretty standard claim and can be worthwhile. why don't you email the IRS and ask for a clarification then you can have some paperwork to back up your position if audited in the future. paperwork is everything

The IRS (and the federal courts) does not consider following the advice of the IRS as justification for you to not pay the taxes the law says you owe.

 

[Lorenzoid]

The IRS (and the federal courts) does not consider following the advice of the IRS as justification for you to not pay the taxes the law says you owe.

Even if the IRS gives you a private ruling letter?

 

[KevinNM]

Even if the IRS gives you a private ruling letter?

Don't know. I know if you call up their assistance line and they give you a bad answer it sucks to be you.