Employee error -- deductible?

[elfling]

Employee erred on 2 invoices for her employer. In order to keep her job, employer demanded she pay him the $133 to "make good" or lose her job. Can that $133 be included on 2106 or go directly to line 21 of sch A? IRS Publication 529 is less than clear on the subject.

Elfling

[Pacun]

What the employer did is illegal here in DC, so if this client lives in a state that it is illegal to ask employees to repay for their mistakes, no deduction allowed.

[jainen]

>>Can that $133 be included on 2106 or go directly to line 21 of sch A?<<

Well, it certainly is "for the convenience of the employer." I would allow it. It's justified under the most important ethical standard guiding our work, sympathy.

[BulldogTom]

It's justified under the most important ethical standard guiding our work, sympathy.

You are kidding, right? The most important ethical standard is to properly apply the tax laws to the facts and circumstances of our client's tax matters. I have sympathy for all my clients, that don't mean they get to deduct anything that makes me feel sorry for them.

Tom

Lodi, CA

[jainen]

>>You are kidding, right?<<

Not really. I've posted a few jokes here, like my "Jest So" last September 21. The response is always underwhelming, but I sometimes get a rise out of the truth. As elfling points out, the rules can be "less than clear." When you have to be subjective, I think the client's best interest is an important and professionally appropriate factor.

What's wrong with this deduction anyway? It obviously has no element of personal enjoyment, it's strictly to benefit the employer. It might be improper for the employer to do it, but that's not our problem. Bosses dock pay and require all sorts of reimbursements and contributions all the time; it's an ordinary and necessary cost of keeping the job, just like using your own car or fixing an office chair.

[BulldogTom]

I was not questioning your statement that the amount is deductible on the schedule a. I believe it is too, as an unreimbursed employee business expense.

I was questioning your statement that sympathy is the most important ethical standard.

So not like you Jainen. You are the person I go to for the "cold hard facts of tax". You are the one I look to rain on my parade when I try to push the envelope.

So it is suprising to hear you say that sympathy is the number one ethical standard.

Tom

Lodi, CA

[jainen]

>>So not like you Jainen<<

What can I say? I'm moving into the chair of Charity in a certain community protective order, and I have to memorize the ritual. After repeating my spiel about a million times, I'm starting to b'lieve it myself!

Anyway, I think things might be changing a little. I ran a search on "sympathy" in my tax research database. Admittedly I got precious few hits, mostly like "cases that would produce sympathy in other courts... may be decided differently by the Tax Court." But even that line comes in a paragraph that starts with, "The Tax Court thought for years that it lacked equitable jurisdiction (deciding an issue based on fairness), but has recently discovered its equitable authority." It goes on to point out "the fine equitable sensitivities regularly found in a U.S. District Court ."

Therefore think big, say I. If this client takes her $150 deduction to District Court, she may well find the sympathy I promised.