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Posted by TxSrv on September 26, 2006, 2:34 am
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Scott Witte wrote:
> ...
> The auditor is disallowing any expenses connected to my
> duties as a board member saying they are only indirectly
> connected to my business.
> ...
Trade associations don't exist unless a group of businesses
pay them money to operate and be effective. In contrast,
contributions to a civic league can be challenged as bearing
no relationship to business other than being a good
corporate citizen.
I would ask the IRS examiner for a citation of authority --
court case or ruling, specific to trade associations and
this "indirect benefit" theory. If no such citation, don't
agree to the disallowance. Further, drawing a distinction
between dues (clearly deductible) and additional cash
contributions in effect, as you say IRS is doing, can't
possibly have any support in case law, etc.
Fred F.
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