8752 / What substantiation requirements apply when a taxpayer deducts business-related entertainment and meal expenses?

Editor’s Note: Under the 2017 tax reform legislation, the previously existing 50 percent deduction for entertainment expenses that are directly connected with a business activity is suspended for 2018-2025. This applies to any activity considered entertainment, recreation or amusement, including membership dues with respect to any club organized for business, pleasure, recreational or social purposes.¹ The 50 percent deduction for meal expenses remains in effect (including meals consumed while travelling for business).

In order for a taxpayer to deduct business-related meal expenses, the taxpayer must maintain records adequate to provide the following information:

(1)  The amount of each separate expense;

(2)  The time and date upon which the expense was incurred;

(3)  The name, address and/or location where the expense was incurred (prior to 2018, if the location information does not make the type of entertainment apparent, the taxpayer must indicate whether it was a dinner, theater, sporting event, etc.);