IRS Issues notice regarding deductibility of certain business expenses
Overview
The IRS Issued Notice 2018-76, which provides transitional guidance on the deductibility of expenses for certain business meals under IRC ยง 274. Notably, the 2017 Tax Act eliminated the deduction for business-related entertainment expenses. Both Treasury and the IRS intend to publish proposed regulations under ยง 274, which will include guidance on the deductibility of expenses for certain business meals. Until the proposed regulations are effective, taxpayers may rely on the guidance provided in the notice for the treatment under ยง 274 of expenses for certain business meals.
The takeaway
Taxpayers should begin to evaluate the impact of the Notice on business meals provided during entertainment activities, including those expenses incurred after December 31, 2017.
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