RothCPA.com discusses an interesting 8th Circuit Court of Appeals case which allowed an employer to deduct certain expenses associated with employee fishing outings. According to the case, in order to deduct these expenses, the company must show:
- it had ‘more than a general expectation of deriving some income or other specific trade or business benefit’ from the fishing trips;
- that active business discussions, meetings, negotiations or other business transactions were conducted on the fishing trips;
- that the ‘principal character or aspect’ of the fishing trips was the active conduct of business, although it is not necessary that more time was devoted to business than to entertainment; and
- the expenditures were allocable to the employees’ conduct of business and the other people on the fishing trip with which business was conducted.