Business Advertising, DE's, Tax Writeoffs
04-02-2012, 05:18 PM
#16
Rennlist Member
You betcha -- I don't want them poking around the rest of my crap. It's bad enough as it is.
04-02-2012, 05:28 PM
#17
Rennlist Member
Andrew, as with other things in the common areas of our backgrounds: when there is doubt....there is no doubt.
04-02-2012, 10:06 PM
#18
Rennlist Member
. Do you want your business gone through with the IRS. When i was fishing a lot, 60+ days a year, I would take industry people out sometimes and I asked my accountant about writing off. His comment do you really want the IRS up you rectum to save a couple of $$ a year. Peter
04-02-2012, 10:25 PM
#19
Drifting
Not true. I have been doing it for years. I buy the cars and company pays the rest (100% of all costs - travel, meals, repairs, tires, brakes, wheels, fees, duct tape, etc.) to "Sponsor" me (and Sly), i.e. to advertise. Never been audited (fingers crossed).
04-02-2012, 11:02 PM
#20
Rennlist Member
I have been audited a few times the last 20 years and each time the irs got nothing because there was nothing.
They have to justify their time I guess...
So they made stuff up and disallowed a bunch of stuff figuring I pay because fighting it was more expensive. Seems they grab stuff that is enough to pay for their time, but just small enough to be too not worth fighting it.
For me the time and money was very high to defend, but not more than if I just would have paid.
I had an agent tell me I should Email and call my customers more instead of visiting them, denying part of travel. I could not prove I broke my coffee machine, so I took it home she said.
She got fired.
Maybe not bad to give them something real so you can pay the penalties and interest so they can close the case.
They have to justify their time I guess...
So they made stuff up and disallowed a bunch of stuff figuring I pay because fighting it was more expensive. Seems they grab stuff that is enough to pay for their time, but just small enough to be too not worth fighting it.
For me the time and money was very high to defend, but not more than if I just would have paid.
I had an agent tell me I should Email and call my customers more instead of visiting them, denying part of travel. I could not prove I broke my coffee machine, so I took it home she said.
She got fired.
Maybe not bad to give them something real so you can pay the penalties and interest so they can close the case.
04-02-2012, 11:13 PM
#21
Drifting
I have been audited a few times the last 20 years and each time the irs got nothing because there was nothing.
They have to justify their time I guess...
So they made stuff up and disallowed a bunch of stuff figuring I pay because fighting it was more expensive. Seems they grab stuff that is enough to pay for their time, but just small enough to be too not worth fighting it.
For me the time and money was very high to defend, but not more than if I just would have paid.
I had an agent tell me I should Email and call my customers more instead of visiting them, denying part of travel. I could not prove I broke my coffee machine, so I took it home she said.
She got fired.
Maybe not bad to give them something real so you can pay the penalties and interest so they can close the case.
They have to justify their time I guess...
So they made stuff up and disallowed a bunch of stuff figuring I pay because fighting it was more expensive. Seems they grab stuff that is enough to pay for their time, but just small enough to be too not worth fighting it.
For me the time and money was very high to defend, but not more than if I just would have paid.
I had an agent tell me I should Email and call my customers more instead of visiting them, denying part of travel. I could not prove I broke my coffee machine, so I took it home she said.
She got fired.
Maybe not bad to give them something real so you can pay the penalties and interest so they can close the case.
My new accountant, an Enrolled Agent, has thwarted previous and repeated attempts by the IRS to crawl up my ***.
As to the DE/race write off...um, no.
04-02-2012, 11:22 PM
#22
Rennlist Member
Like the others have said its best to speak with a very good tax expert. I have an excellent CPA and I provide consulting services to some very large law firms. I asked this exact question to my CPA and notable tax attorneys at two different firms. The response was.......don't do it, the reasons were many but some facts that stood out to me and some of these have already been mentioned.
Unless there is direct financial gain meaning a purse and or prize for winning then the activity will most likely be construed as a hobby.
The advertising aspect was explained as follows. The cost of the wrap and or lettering may be an advertising expense just like a newspaper ad or billboard but not associated costs to operate the vehicle.
You need to discuss with your tax expert if you pay AMT because you could gain zero benefit but increase unwanted scrutiny which is just a lose lose scenario.
I am no expert in this matter just sharing responses from people most would consider to be an expert.
Unless there is direct financial gain meaning a purse and or prize for winning then the activity will most likely be construed as a hobby.
The advertising aspect was explained as follows. The cost of the wrap and or lettering may be an advertising expense just like a newspaper ad or billboard but not associated costs to operate the vehicle.
You need to discuss with your tax expert if you pay AMT because you could gain zero benefit but increase unwanted scrutiny which is just a lose lose scenario.
I am no expert in this matter just sharing responses from people most would consider to be an expert.
04-02-2012, 11:38 PM
#23
Drifting
Like the others have said its best to speak with a very good tax expert. I have an excellent CPA and I provide consulting services to some very large law firms. I asked this exact question to my CPA and notable tax attorneys at two different firms. The response was.......don't do it, the reasons were many but some facts that stood out to me and some of these have already been mentioned.
Unless there is direct financial gain meaning a purse and or prize for winning then the activity will most likely be construed as a hobby.
The advertising aspect was explained as follows. The cost of the wrap and or lettering may be an advertising expense just like a newspaper ad or billboard but not associated costs to operate the vehicle.
You need to discuss with your tax expert if you pay AMT because you could gain zero benefit but increase unwanted scrutiny which is just a lose lose scenario.
I am no expert in this matter just sharing responses from people most would consider to be an expert.
Unless there is direct financial gain meaning a purse and or prize for winning then the activity will most likely be construed as a hobby.
The advertising aspect was explained as follows. The cost of the wrap and or lettering may be an advertising expense just like a newspaper ad or billboard but not associated costs to operate the vehicle.
You need to discuss with your tax expert if you pay AMT because you could gain zero benefit but increase unwanted scrutiny which is just a lose lose scenario.
I am no expert in this matter just sharing responses from people most would consider to be an expert.
04-02-2012, 11:53 PM
#26
Rennlist Member
okay, I see the problem now. Personal vs. business. Personally it will not work - I agree. For a business it will work to "sponsor" a DE track car, same as advertising at the DE or track or event. My company sponsors my DE expenses. If the company get an audit then IRS will see expenses paid by company - no direct payment to me.
Best to just drop this whole speculation as Big Brother may be watching. Black Heli's
Peter
04-04-2012, 10:47 AM
#28
Rennlist Member
Interesting angle... of course, to some degree your asking to hear from them at that point. But then again, don't most people have something real when you come right down to it?
04-04-2012, 11:06 AM
#29
Rennlist Member
I've never had something real to give them, so they spend weeks of you accountants time, make it up and you have to fight to get justice and you have to pay your lawyer.
I'm concidering the other angle, give them something and pay the fine so they justified their time spend, justice is served and they go away without accountant and lawyer costs.
I'm concidering the other angle, give them something and pay the fine so they justified their time spend, justice is served and they go away without accountant and lawyer costs.
04-04-2012, 11:09 AM
#30
Rennlist Member
I've never had something real to give them, so they spend weeks of you accountants time, make it up and you have to fight to get justice and you have to pay your lawyer.
I'm concidering the other angle, give them something and pay the fine so they justified their time spend, justice is served and they go away without accountant and lawyer costs.
I'm concidering the other angle, give them something and pay the fine so they justified their time spend, justice is served and they go away without accountant and lawyer costs.
I have a friend at my marina who is a former agent. He is a decent guy and all around can be trusted -- I plan on asking him about the tactic.