Discussion:Meals deduction as restaurant research?

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Tax Questions --> Meals deduction as restaurant research?

Colleen (talk|edits) said:

23 March 2006

I have a new client who is a restaurant manager. He has taken a deduction on form 2106 in past years for meals at other restaurants,as research to help him in his job. His employer does not reimburse. I am ok with the general concept, but he has given me receipts for nearly $10,000 of these meals and I am trying to determine where to draw the line. Most are meals for more than one person (do we only consider his meal or that of his companions?); many are repetitions at the same restaurants (how much does he learn from repeated visits?);most involve hefty bar and wine charges.

I cannot find any guidance --can someone steer me to some IRS code or pubs that I can show to him for authority? Any advice about how you handle these matters?

Martineo (talk|edits) said:

23 March 2006
I would say : "You have to be kidding. Find another preparer"

This are personal expenses. Unbelieved!!!! No common sense. How often does anyone need to go to other restaurants to do a marketing research?

PDXCPA (talk|edits) said:

23 March 2006
This is kind of funny... Client thinks he has found a loophole with you preparing his return because you allowed the $100 deduction in year 1. Good question, though. Your argument should it is not "ordinary and necessary" at that level. Good luck.

Jmb1007 (talk|edits) said:

24 March 2006
I just went thru an audit with a client regarding the above. These deductions will be disallowed unless your client has a letter on

company stationery stating that his job requires him to go to restaurants to research menus, food etc. The letter must also state that he is not reimbursed for any of these expenses. (I did not prepare the return but did help him with the audit). Hope this helps.

Sherrians (talk|edits) said:

24 April 2007
I have a client that is an owner of a Restaurant and wants to deduct 100% of meals at local restaurants as a research and development cost. Does anyone have any experience with doing this?


Wwtaxes (talk|edits) said:

24 April 2007
I do not have any experience with an audit on this matter, but I did have a similar client (S Corp). I told him he could take reasonable M&E expenses for checking out the competition. We did not allow bar bills bc that wasn't what he was comparing. We allowed one or two visits to a comparable establishments. I made him record what it was that they were checking and why as part of the records. Of course, as an S Corp, the question is where do you draw the line between checking out the competition and business meals? Many of his M&E receipts could have been either.

Death&Taxes (talk|edits) said:

25 April 2007
I've had department store buyers canvassing other stores on the weekends, even buying merchandise but getting reimbursed for same and not using the items bought. The only thing I find outlandish in this claim is that owners and chefs are a tight community and probably are recognized when entering a competitor's restaurant. Great chefs often visit food distribution centers where they see and meet their fellows. Yet there is much to be said about keeping ahead or up with the competition.

Tstolley (talk|edits) said:

25 April 2007
Had a client try to deduct $60,000 in meal expenses as R&D while he was abroad. His company grossed about $80,000 and netted a small income without the meals. I told him no way, he walked, I couldn't have been happier.

JR1 (talk|edits) said:

April 25, 2007
Well, D&T, how long before you have to give up the food eaten? If it's at the restaurant in question, would that qualify as soon enough? Image:smile.jpg

Death&Taxes (talk|edits) said:

25 April 2007
"Oh the things I do for research." I had a food critic client for the paper who privately told me to never go in a place in Philly....she was the 'mystery muncher' and noted she barely made it to the curb outside. But the column was one that appeared in the 'weekend' section promoting everything, so no mnetion was made of her trip to Ptomaine Town.

I think it is where you are in the 'Food Chain' that makes it legitimate or not. Let's send the Executive Chef to Italy to meet chefs there and develop recipes. Only the most hidebound of our people would object to this. What is he pays his own way; I see little problem with proper record keeping especially since good chefs make their own resume. I might differentiate for owners who do little in the kitchen

Actionbsns (talk|edits) said:

25 April 2007
I have a client in this same situation and posted during the tax season regarding their use of the "R&D" claim. The consensus in that discussion was different than this one. Can you do a search to see if you can find it? Sorry, I'm not good at putting in links or smiley faces or elephants running around, but the search key should find it, or maybe someone else remembers and can link you there.

Dblchai (talk|edits) said:

11 February 2010
To follow up on this thread. I have a client that is a food critic for a regional business news rag. She must dine at the specific restaurants for which she will review. She does not take a guest but often has to order multiple items to be able to write a comprehensive review. I am thinking that calling this expense "research expense" and taking 100% is legitimate. Any thoughts?

R2 (talk|edits) said:

11 February 2010
IRS has already issued a ruling on this. You can guess what the ruling said.

R2 (talk|edits) said:

11 February 2010

Taxaway (talk|edits) said:

11 February 2010
Two ends of the spectrum: One client was a wine salesperson who advised restaurants on pairings, visiting anonymously was part of the engagement. She kept meticulous receipts of the meals and when with friends, only deducted her expenses subject to 50% M&E.

The other nonclient a waiter who went out with friends and wanted to deduct the cost because he could observe...my reply 'observe what? how they carried the dishes?' His manager 'did it all the time.' Then he wanted to deduct his CDs because he wanted to start a recording career and listening to music would help!

To join in on this discussion, you must first log in.
Personal tools