Write off

[Fisherman1]

Question for some of you guys. Had a guy tell me the other day that he writes off most of his fishing expense. I am not saying I agree with this or would do it but here goes. He said all I have to do is fish one fishing tournament, not a pro one. He adds up all his gas for truck going to and from fishing site. At end of year he writes off all his lures, poles etc, claims 32 cents for every mile he drives to go fishing, also adds up all boat gas. He said all you have to do if checked is say you plan on being a pro someday so every time you fish it is a practice. I guess the lures etc are tools of the trade. He never fishes a pro tournament. If it were me they would have me in jail. Can he really get away with this??

[IRS]

That guy is probably one of the same guys complaining about farmers getting a subsidy. :) He'll probably be rooming with the exec's from Enron and Arthur Andersen soon, if you know what I mean.

If your fishing activities are a 'hobby' (see IRS definitions), you cannot write off expenses. If you can demonstrate that your fishing is an income producing activity (i.e., a business), then you can write off expenses.

[steve(IL)]

There is also a time limit stipulation (I believe) - you must show a profit within a certain number of years. I'm not sure of the consequences if you don't. I think the point is that you can't continue to take losses year after year.

[CPA]

Well said IRS!!!

Anyone can write off anything they want until they get caught!

With the small amount of people getting audited every year, you could probably get away with it for a while. Just know that when you get caught, you will have to pay up.

[John]

You can write it off with a loss showing for a few years, but if you claiming its a business or a job, your required to make a profit at some point so be careful.

[EyeJacker]

If he is writing off every day fishing expenses without a profit motive he is indeed fishing in "posted" waters. The hookset, when and if it comes, will not be pleasant. There must be a profit motive and black ink must appear on the bottom line 2 out of every 5 years. If not, his endeaver will be classified as a hobby and all costs will be disallowed. If such findings as willfull, gross negligence and fraud are determined there are stiff penalties and believe me you would rather be rasslin' with saltwater crocs, than dancin' with IRiS. Expenses must be ordinary and necessary and there better be some revenue showing up on that return now and then. The IRS' audit selection program is known and understood by very few, however, it is extremely effective at selecting returns that will yield heavy limits. A lot of very honest people, for some reason, feel it is ok to bend the rules when it comes to filling out their tax return.
After 2o years as a public accountant, I can tell you that you may, indeed, avoid scrutiny for a while, however, you will sleep a lot better(and at home) if you don't evade taxes! :)

Jack