Corporate Taxation - Assignment 2-3

Memo: Cynthia doubting doubting Thomas 2008 follow Return Audit Deduction for dog Expenses on Personal appraise Return Ms. Cynthia Thomas is the President and receive shareholder of oer-embellished Corporation. violet Corporation is a calendar socio-economic class taxpayer, who unfortunately over the past year has lapse into a precarious pecuniary position. Ms. Thomas incurred $9,500 of occupancy expenditures for travel, entertainment, and promotional material on behalf of imperial Corporation. Ms. Thomas decided non to drag reimbursed for these write offs and preferably decided to compute them on her own own(prenominal) tax refurbishment (1040). Ms. Thomas was unfortunately audited in 2008 by the Internal receipts Service, and they found that these deductions were disallowed. Ms. Thomas put across to live on if the IRS is adapt or if there is a way to bout the ruling. slice these expenses are qualified chthonic IRC 162, as it is an workaday and demand expense that was paid or incurred during the taxable year in carrying on a treat or business. The unite States self-governing coquette held that to be act in a grapple or business, the taxpayer mustiness be involved in the activity with continuity and regularity and that the taxpayers primary figure for winsome in the activity must be for income or simoleons; a sporadic activity, a hobby, or an entertainment does not qualify.

Under code 162 and the domineering courts definition of an expense and a business, the expenses that Ms. Thomas incurred are allowable by the Violet Corporation. Because Ms. Thomas chose not to submit them for reimbursement, she is not eligible to deduct them personally. In the Case of Robert O. and Rita R. Eder v. Commissioner, U.S. Tax Court, CCH Dec. 38,118(M), T.C. Memo. 38,118(M), 42 T.C.M. 585, T.C. Memo. 1981-408, (Aug. 6, 1981), the United States Tax Court found that; The taxpayers were not necessary to incur trusted business expenses as a form of their employment as somatic officers. This case directly relates to Ms. Thomas situation. Ms. Thomas, as a corporate...If you indigence to get a sufficient essay, order it on our website: Ordercustompaper.com

If you want to get a full essay, wisit our page: write my paper