Accountant's Yacht Expenses

[Lee B]

"This case joins one of my favorites in my tax class, Henry v Commissioner, which Paul Caron blogged about a couple of years ago. In that case an accountant attempted to deduct insurance and maintenance cost from his purchase of a yacht on which he flew a red, white, and blue pennant with the numerals ‘1040‘ on it. Henry, like Avery, failed to provide enough evidence to sustain the connection between obtaining clients for his accounting practice and his yachting, and the Tax Court disallowed those expenses as personal nondeductible expenses under Section 262."

This has to be my all time favorite Tax Court case

Years ago I had a long meeting with prospective clients who earned commissions as independent contractors selling merchant card services

to various businesses. They made a substantial amount of money, enough that  they purchased a  Million $ Marathon Motor Home.

They were Accountant shopping looking for someone who would agree to deduct their Motor Home as a business expense.

They argued that when they drove their Motor Home to the Oregon Coast, they would visit current customers and prospect for new

customers. When I explained to them why they couldn't do that, they left still shopping for an accountant. 

[JohnH]

But you still provided a service.  They learned what to say and what not to reveal to the next accountant they interview.