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Feds end deduction for entertaining clients

MWE Headshots Thumbnail LanceChristensen - Feds end deduction for entertaining clients“I don’t have any evidence that people have changed their minds about [entertaining their clients]. But these types of things usually have an impact,” said MWE Partner Lance Christensen in this Long Island Business News article. “People may not go to some of these business entertainment functions or they may get fewer tickets or medium range seats instead of the front row.”

 

 

LIBN LOGO hi res Nov20101 300x80 - Feds end deduction for entertaining clients

 

 

 

 

“I don’t have any evidence that people have changed their minds about things. But these types of things usually have an impact,” said Lance Christensen, tax practice leader at Margolin, Winer & Evens, in Garden City.  “People may not go to some of these business entertainment functions or they may get fewer tickets or medium range seats instead of the front row.”

The decision to eliminate the entertainment deduction, Christensen said, came in the context of a major corporate tax cut – pumping more cash into companies.

“People do lavish things. It’s hard for them to audit. Is there really business being conducted?” Christensen said. “They needed some pay-fors. This was a negotiation between the Republicans and the Democrats. They needed things to bring the deficit down.”

Christensen said professionals such as accountants and attorneys who often entertain will see their costs rise as well as others who entertain clients.

Christensen believes firms that entertain will continue to do so, or risk losing business, a much bigger price to pay.

“You need to entertain your clients or somebody else would,” he said. “The price went up significantly. If you’re going to do it no matter what, you do it. But you might do it fewer times or with less expensive seats.” Read more>>>

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