Tax Laws & Guidelines
Sports & Event Tickets
The Internal Revenue Code imposes rules on the tax documentation and deductibility of tickets
Tickets are 0%, 50%, or 100% deductible based on purpose of use and reliability of documentation. No documentation leads to no deduction and a significant waste of dollars.
To be eligible for a deduction, all entertainment expenditures must include the amount of the expenditure, the time and place, who the attendees were, why they are a viable business expense, and must include a receipt for any expenditure over $75.
Tax documentation = Tax deductibility
Taxpayers generally struggle with obtaining and maintaining tax documentation
Problems created by a lack of a system or internally built system
- Impossible to collect necessary detail
- Attendees change at the last minute
- Documenting unused seats
- Too many transactions
- Changes in users of tickets
Pain Points in Obtaining & Maintaining Documentation
- Reliant on someone “policing” tickets
- No methodology used consistently leads to inconsistent results
- Hardcopy documentation and reporting is impossible to maintain and store
Solutions to Obtaining & Maintaining Proper Documentation
- Easily collect required tax documentation detail
- Accurately track required tax documentation
- Efficiently report on required tax documentation
- Be available to employees on an as needed basis
- Centralize purchasing, record keeping, and accessibility to information
Conclusion: Without centralization the entire process is weakened by human error, misunderstanding of tax rules, and inconsistency in application