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Max W

Training Camps & Seminars

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I have a client whose audit is next Wednesday and he had claimed some education expenses that, of which some, I don't think are going to fly.

One company is Salesdogs and I have no problem with that, but he has $15K in Peak Potentials, which also goes under Success Resources America. http://successresourcesamerica.com/

This one has a number of seminars and camps, most of which seem to be personal development courses, especially the two that the client attended - Wizrd  Training Camp and Enlightened Warrior.

I would like to hear some ideas on this, particularly from those who have had to deal with this.

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You don't say what kind of client or what the hypothetical business relationship is with these expenses, which matters a lot.

 I can envision several potential businesses where these expenses might be deductible, i.e. motivational speaking, personal coaching, sales & marketing

consulting, etc.  However I don't have and have never had a client where these expenses would be deductible.

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His business is hauling junk to the dumps.  Sounds mundane but he grosses $150K/yr.

He is trying to expand his business sales and hire employees.  So, Sales & Marketing certainly fit, as well as networking.  Having employees could encompass the use of leadership and motivational techniques.  Beyond that, the some of the courses are motivational (for the attendee) and how to start new businesses, so these parts certainly do not fit.

He spent $15K on this one year alone and I think the IRS will look at this as whether or not it is Ordinary and Necessary to spend this kind of money on this type of business.

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If he went to a national recycling/junk haulers convention and took 20 or 30 hours of paid seminars, no one would question the deduction.

The challenge will be to show links between these seminars and his business, i.e. improved sales, new customers, improved employee productivity etc.

It will take more than just saying those are the reasons he took the seminars, you will need specific examples, names and statistics.

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Max,

I would refer IRS to their seminars, meetings, conferences of which it was recently made public the enormous sum of money that IRS spent on different ones.....just google:  "irs and enormous money spent on seminars".  I think that once you take some of those figures you will find and divide them by the number of employees in attendance at different ones, how could they possibly say that a measly $15.000 would be an unusual business expense for a self employed business man to try to gain enough knowledge to be able to run his business more efficiently, thereby owing more income taxes because of it!.

Good luck!

 

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