Business Expenses-J. Frank Best, Tax Controversy CPA/U.S. Tax Court Litigator

A recent Tax Court decision was reported dealing with Business Expenses.  J.  Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for our clients. 

Couple Can’t Deduct Entire Grocery Bill for Household That Includes Foster Individuals: In Kho v. Comm’r, T.C. Summary 2018-32, the Tax Court denied a couple a deduction for total grocery expenses as business expense where they provided foster care for two men with developmental disabilities, one of which required a gluten-free diet. The court noted that any excess cost to the couple in providing gluten-free meals to their client had already been accounted for in the amount that the IRS allowed as a deductible expense for groceries and that the couple could not deduct their entire grocery bill as  business expenses because such costs were personal expenses.

The Tax Court also concluded that petitioners are liable for the penalty imposed under section 6662(a) with respect to the portions of the underpayments attributable to the adjustments that were sustained in this case.