AICPA Says Taxpayers Need Immediate Guidance about Meals and Entertainment Deductions

April 2, 2018

  • The Tax Cuts and Jobs Act disallowed deductions for many common business expenses such as entertainment and transportation fringe expenses.
  • Taxpayers need guidance from the Department of the Treasury and the Internal Revenue Service in order to comply with the changes on their 2018 tax returns and financial statements.
  • The AICPA made recommendations, with illustrative examples, about nine broad issues.

Washington, D.C. (April 2, 2018) – The American Institute of CPAs (AICPA) today asked the U.S. Treasury Department and Internal Revenue Service (IRS) for “immediate guidance” about the changes to the Internal Revenue Code mandated by the Tax Cuts and Jobs Act (TCJA) (Pub. L. No. 115-97) that are related to the disallowance of entertainment, amusement, recreation and qualified transportation fringe expenses.  The AICPA also offered several recommendations. 

“Taxpayers require clarification in order to account for the changes in deductibility of these items and revise their accounting systems and expense and reimbursement policies and to comply with them on their 2018 tax returns and financial statements,” Annette Nellen, CPA, CGMA, Esq., wrote in her April 2 letter.

The AICPA requested guidance and made recommendations, with illustrative examples, about nine broad issues related to the changes to Internal Revenue Code Section 274:

  • Client-related business meals
    • With current and prospective clients incurred at times other than before, during or after an entertainment event
    • With current and prospective clients incurred before, during or after an entertainment event
  • Employer-provided business meals
    • Related to restaurant and food service workers
    • Definition of “facility”
  • Employer-provided snacks and other food products
  • Employer-hosted recreational, social and similar activities
  • Advertising
  • Charitable contributions
  • Qualified transportation
  • Transportation and commuting
  • Membership dues