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Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, October 25, 2011

Tax Court: 'Student Incentive Expenses' Are Not Deductible

Tax Court Logo 2Farias v. Commissioner, T.C. Memo. 2011-248 (Oct. 24, 2011):

Petitioner claimed that as a teacher she occasionally used "candy and sugar" as student incentives. A number of the receipts she offered to substantiate these expenses also include other food items and household goods. Petitioner also testified that she purchased a U.S. savings bond that was presented to a student in recognition of community service provided to the school.

There is no evidence that the school required the purchase of the candy or the savings bond for petitioner's students. These expenses were not necessary to petitioner's job; and no matter how well intentioned, gifts to students are not deductible as business expenses.

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Tracked on Nov 2, 2011 7:39:25 AM


If it's a public school, donate such items to the school, and claim them as a charitable deduction. No 2% haircut to worry about, either.

Posted by: Bob | Oct 25, 2011 8:03:18 PM

Tax tip: If you're a public school teacher, don't expect much sympathy from an IRS agent if you claim $23K of "employee business expenses," including that vacation to Italy.

No wonder she was "pro se." No tax lawyer would touch this case with a ten foot pole.

Posted by: Elmer Stoup | Oct 26, 2011 2:48:50 PM