Checklist of What Rules and Information the IRS Will Be Verifying

Deductions & Expenses - Entertainment

____ You can establish that a business benefit could reasonably be expected as the result of incurring entertainment expenses.

____ To be allowed a deduction for entertainment expenses, you can furnish information to establish that: (a) payment was actually made during the taxable year and (b) the expense was ordinary and necessary to your business or profession.

____ To be allowed a deduction for entertainment expenses, you have maintained adequate records to establish: 1. Amount of each expenditure, 2. Date the entertainment took place, 3. Location of the entertainment, 4. Business purpose for the entertainment, 5. Business relationship to you of the person entertained.

____ You did not deduct the cost of entertainment allocable to your spouse or to the spouse of a business customer unless you can show that you had a clear business purpose rather than a personal or social purpose in incurring such expenses.

____ You reduced the amount of your otherwise allowable entertainment expenses by 50%.

____ Your deduction for tickets to an entertainment event did not exceed the face value of the ticket. Also your deduction did not exceed the face value of non-luxury seating at the event.

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