Tax Insights: Live Event Ticket Deductions

Taking current or potential business associates to a football game, concert, musical or other live event helps develop and sustain business relationships. The Internal Revenue Code (IRC) acknowledges the legitimacy of treating ticket costs for such activities as tax-deductible business expenses. 

Individuals or organizations seeking to claim such costs, however, need to be aware of IRC provisions that define the percentage of expense that may be claimed, the circumstances in which such deductions may be claimed, and the substantiation processes employees and employers must follow when claiming such deductions.

For example, three criteria must be met to claim a live event tickets as entertainment expenses:

1. The ticket cost must be incurred by the employee in connection with performance of services to the employer.
2. An employee must provide an employer with proof of the expense within a reasonable amount of time. 
3. Any reimbursements made to employees in excess of substantiated business expenses must be returned to the employer.

Employers need to be aware of IRC provisions regarding deductions for tickets to live events, and in turn must educate affected employees. Related processes must be implemented and followed to ensure such tax deduction claims are substantiated. Read more about live event ticket deductions in Weaver’s Tax Insights document here.