The tax law requires you to document the meals and entertainment expenses, including the parties involved and the business purpose. A North Carolina man must have been quite creative when he filled out his expense reports:
James Smith pleaded guilty to a tax evasion charge Thursday morning. He is the owner of a Charlotte paving company called Red Clay Industries.
Smith admitted in court that he wrote off payments to a company called Soft Touch Promotions as business expenses. Soft Touch Promotions was one of the names used by Sallie Saxon for her prostitution ring.
And to think "Mr. Smith" was his real name all along. He will have to pay up more than $19,000 in taxes and up to $30,000 in fines.
The items included in the Tax Update Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation.
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