alliantgroup’s Director of IRS Practice & Procedure and former IRS Commissioner of the Small Business/Self-Employed (SB/SE) Division Kathy Petronchak was featured recently in Tax Notes in an article on the controversy surrounding the deduction for client business meals.
In Stephanie Cumings’ piece “Unclear if the IRS Can Save the Client Business Meal” Petronchak comments on the client business meal deduction that seems to have unintentionally been left out of the 2017 tax reform bill signed into law late last year. In the article, Cumings weighs the opinion of multiple tax experts on if the IRS has the power to restore the deduction by issuing regulations that clarify if such meals are considered “entertainment” within the IRS’s regulatory guidelines. Petronchak states that this distinction could be interpreted by the Service in different ways — but whatever the IRS decides, it must issue guidance offering some clarity on the deduction.
Kathy Petronchak of alliantgroup LP, who chaired the AICPA’s meals and entertainment task force, said the foggy relationship between meals and entertainment in the regulations partially prompted the letter. She added that it’s possible the IRS will draw the line at meals served in entertainment venues — like luxury boxes at sporting events — while client business meals that are separate from any form of entertainment will remain deductible. But either way, Petronchak said the most important thing is that the rules be clear.