Corporate Taxation - Assignment 2-3

Memo: Cynthia doubting doubting Thomas 2008 measure out Return Audit Deduction for cable Expenses on Personal evaluate Return Ms. Cynthia Thomas is the President and shape shareholder of over-embellished Corporation. chromatic Corporation is a calendar socio-economic class taxpayer, who unfortunately over the past year has come back into a precarious financial position. Ms. Thomas incurred $9,500 of ancestry expenditures for travel, entertainment, and promotional material on behalf of imperial Corporation. Ms. Thomas decided non to drag reimbursed for these write offs and sort of decided to compute them on her own own(prenominal) tax grant (1040). Ms. Thomas was unfortunately audited in 2008 by the Internal tax Service, and they found that these deductions were disallowed. Ms. Thomas bespeak to live on if the IRS is recompense or if there is a way to bout the ruling. art object these expenses are qualified infra IRC 162, as it is an workaday and unavoidable expense that was paid or incurred during the taxable year in carrying on a transaction or business. The unite States controlling lawcourt held that to be in use(p) in a switch or business, the taxpayer moldiness be involved in the exertion with continuity and regularity and that the taxpayers primary figure for attractive in the activity must be for income or clams; a sporadic activity, a hobby, or an entertainment does non qualify.

Under code 162 and the ultimate courts definition of an expense and a business, the expenses that Ms. Thomas incurred are deductible 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 inevitable to incur trusted business expenses as a trail of their employment as somatic officers. This case directly relates to Ms. Thomas situation. Ms. Thomas, as a corporate...If you indispensableness to get a rich essay, order it on our website: Ordercustompaper.com

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