HV Ken Posted February 23, 2008 Report Share Posted February 23, 2008 Client is the news anchor for local cable station. She gets her haircuts, highlights, and blow-outs provided for free, but is asking to claim her out of pocket expenses on tips she gave at each salon visit. In 2007, she spent $1185 on tips in 107 visits. Would this be considered an unreimbersed job expense (on Schedule A) since it is solely for the purpose of her profession? Any pointers to IRS guidelines governing this scenario would be appreciated. We did search Publication 529, the IRS website, performed google searches, etc., but didn't find anything specific. Thanks! Quote Link to comment Share on other sites More sharing options...
TaxmannEA Posted February 23, 2008 Report Share Posted February 23, 2008 Let's see........... She only gets haircuts because she is a news anchor. If she was unemployed, she would never groom her hair. (Sounds like my sister-in-law!!) And since she doesn't pay for the stylist, she wants to deduct the tips. I think that the IRS would boot that down the hall. Personal grooming expense is usually not considered deductable as you would groom yourself anyway. It's not an extra ordinary expense. Quote Link to comment Share on other sites More sharing options...
jainen Posted February 23, 2008 Report Share Posted February 23, 2008 >>it is solely for the purpose of her profession?<< Not a chance--this has already been to court many times. In Hynes v. Commissioner, 74 TC 1266, a TV news announcer claimed haircuts were required under his contract to maintain high standards of appearance. The legal ruling was that "expenses for one's grooming were inherently personal in nature." Quote Link to comment Share on other sites More sharing options...
RoyDaleOne Posted February 23, 2008 Report Share Posted February 23, 2008 As close as I could find: "on camera" costs such as wardrobe, make-up, or hair" are deductible. Tips would be part of "hair" costs. There is a rub in that who pays the costs, employer or employee. Source MSSP: entertainment 1 Quote Link to comment Share on other sites More sharing options...
HV Ken Posted February 23, 2008 Author Report Share Posted February 23, 2008 Thanks for the quick replies. Seems we have a difference of thoughts here. jainen cites a court case where it was disallowed; RoyDaleOne cites a source "MSSP" that claims it is allowed - is there a web site for this? What is MSSP? The leading google hit is Managed Security Service Providers, and I don't think that's it! Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 23, 2008 Report Share Posted February 23, 2008 Thanks for the quick replies. Seems we have a difference of thoughts here. jainen cites a court case where it was disallowed; RoyDaleOne cites a source "MSSP" that claims it is allowed - is there a web site for this? What is MSSP? The leading google hit is Managed Security Service Providers, and I don't think that's it! I would go with the court case. This has always been my understanding that all "personal grooming expenses" were personal expenses and NOT deductible. Haircuts, manicures, hairstyling, facials, tanning, make-up, etc. I guess if we stretched the definition, we could include the cost for showering, shaving, deodorant, body lotion, cologne, etc., since that would all be seen "on camera?" Quote Link to comment Share on other sites More sharing options...
HV Ken Posted February 23, 2008 Author Report Share Posted February 23, 2008 I did find Market Segment Specialization Program (MSSP) on the IRS site. However, I have tried a variety of seaches to find the specific audit guide for entertainment without success. Should I be able to find these on the IRS web site? If so, is there a name/number I can reference? Quote Link to comment Share on other sites More sharing options...
HV Ken Posted February 23, 2008 Author Report Share Posted February 23, 2008 OK - I did find a copy of MSSP Entertainment at: http://kalcpa.com/2002%20SBRG/pdfs/music.pdf. It's dated 1994 - I guess that's why I can't find it on the IRS site?? Quote Link to comment Share on other sites More sharing options...
HV Ken Posted February 23, 2008 Author Report Share Posted February 23, 2008 Another reference I found based on your leads: http://www.unclefed.com/SurviveIRS/MSSP/entertainment.pdf 6. Grooming and Other Personal Items -- As a rule, these items are too personal; they will generate a business deduction only in the presence of very special circumstances. a. Make-up, Haircuts -- There may be a possible deduction for stage make-up (with substantiation that taxpayer was required to purchase it, did purchase it, and never wore it offstage), but it's a narrow exception. For example, Drake v. Commissioner, 52 T.C. 842 (1969) supra. The Tax Court denied a deduction for make-up to a (male) TV newscaster, in Hynes v. Commissioner, 74 T.C. 1266. Looks like the conclusion is what jainen posted! Quote Link to comment Share on other sites More sharing options...
jainen Posted February 23, 2008 Report Share Posted February 23, 2008 >>that would all be seen "on camera?"<< Why should a camera make any difference? We all have to present a nice appearance at work. I mean, why would a tax preparer like myself need to wear shoes and a shirt, if not to meet the standards of my office? (Okay, bad example--there are at least 25 excess reasons why I need to wear a shirt.) In the court case I cited, the taxpayer also tried to deduct his suits which had to be a certain color. But it wasn't a costume; he didn't take it off when he left the set. It was just an ordinary thing in that regards. Maybe not his personal preference, but not that closely tied to job performance. MSSP guides are for the IRS's administrative use; they have no value outside an audit. (Remember that under Circular 230 we are not allowed to base our position on how something might be treated in audit.) Still, they provide a certain orientation to interpreting the code. The document HVKen found said concerning live performers, "The single most common audit adjustment is disallowance of personal expenses.... The fact that a taxpayer may derive a peripheral business benefit from an expense does not convert a personal expense to a business deduction." Quote Link to comment Share on other sites More sharing options...
Byron Posted February 23, 2008 Report Share Posted February 23, 2008 She got 107 salon visits for free. What did the salon get? Free advertising? Last one of these I saw involved trading "free" services for "free" radio advertising. I think the IRS considers this barter. Should she report the value of 107 visits as income? Maybe she ought to worry about more than non-deductible personal expenses. Quote Link to comment Share on other sites More sharing options...
HV Ken Posted February 23, 2008 Author Report Share Posted February 23, 2008 >> In the court case I cited << Hi jainen, thanks for your input. Is there a place on line where the court decision can be read? I have found many hits that cite the case, but none that have the actual case. Thanks! Quote Link to comment Share on other sites More sharing options...
jainen Posted February 23, 2008 Report Share Posted February 23, 2008 >>Is there a place on line where the court decision can be read?<< This has been the law of the land a very long time -- since 1980. Tax Court publishes its decisions at www.ustaxcourt.gov, but not that far back. You can find the opinion in any legal or tax research database by subscription, or at your local county law library for free. Quote Link to comment Share on other sites More sharing options...
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