M&E

[imjulier]

Just curious. Whaty does evertone else say when clients claim to know the M&E rules and know that the 50% limitation doesn't apply to their transactions? It only takes one year for a new client to determine that they would rather not report the M&E and bury the expenses in another category like marketing, presentations, etc. Since I have yet to have a client in 10 years that is willing to take the 50% hit, I'm wondering whjat everyone else does? I generally argue with them for a while and then lose them as a client because I won't treat it the way they want it to be treated. I now there are legitimate exceptions but they don't care. What do you do?

[mcb39]

I put it down at 50%. It is what it is.

[Jack from Ohio]

Just curious. Whaty does evertone else say when clients claim to know the M&E rules and know that the 50% limitation doesn't apply to their transactions? It only takes one year for a new client to determine that they would rather not report the M&E and bury the expenses in another category like marketing, presentations, etc. Since I have yet to have a client in 10 years that is willing to take the 50% hit, I'm wondering whjat everyone else does? I generally argue with them for a while and then lose them as a client because I won't treat it the way they want it to be treated. I now there are legitimate exceptions but they don't care. What do you do?

If audited, YOU will get dinged for knowing, but not reporting correctly AFTER the auditor disallows all those expenses. Is it worth it? Preparer penalties at $500 per item add up real fast!!!

Follow the rules, or send them on their way.

If they are willing to falsify that, what other items are they falsifying?? Human nature is so predictable!!

[Lee B]

In 20 years, I can honestly say that I have never had this specific issue happen.

I have certainly had other strange issues pop up, but not this one.

[joanmcq]

I've had clients look disappointed when they hear of the rule, but never try to bury the expenses later on. Anyone that's wants to fudge expenses gets the door.

[KINGCHUCK1971]

I only explain myself once then I point to the door. I also tell them that apparently they need to prepare their own return since they know so much supposedly.