California provides us with today’s story. Mr. Phillip Doris has been a prison guard at San Quentin since 1982.
According to the tax court:
“In 2006 petitioner worked an average of 60 hours per week, earning $178,528.00″
(Before you spit out your coffee: I would say nice work if you can get it. But I tell you what…. I’d rather be homeless than be a prison guard. It is mind-numbing, dehumanizing work. As I’ve said from a lot from inmate visits I used to do in my days of habeas corpus appeals here in the fine state of Connecticut: “everyone in prison is doing time…everyone.” That said, California may be able to find someone willing to do the job for less)
But that’s not really the point of this blog. Rather, if you want to write-off your go-kart racing hobby as business expense, you can, BUT TREAT IT LIKE A BUSINESS.
In this case, Mr. Phillips attempted to write off expenses related to his Go-Kart racing. But he did not:
- maintain accurate books
- have a separate business account
- advertise
- have a business plan
- did not have a profit motive similar to other go-kart companies
Doing the exact opposite of Mr. Phillips will go a long way to demonstrating that otherwise hobby expenses are legitimate expenses. If you wish to write-off a business expense, you need to have a business.
(Mr. Doris did represent himself at trial. Did he have a fool for a client? Who knows for sure)