Is there any way that expenses incurred by an S-corp employee subject to AMT who provides several pickups as part of the employment agreement to do so without additional compensation be deducted other than on Sch. A ? IRS disallowed deduction.
No way to fix it retroactively. On a go-forward basis, the S-corp could reimburse pursuant to an accountable plan. Otherwise, you're stuck with Schedule A.
As Phoebe stated the Accountable Plan is critical
Employee is not a stockholder but previously had own Indep. Contr. business. Continues to use his 5 trucks and equipment for jobs as employee but also did follow-up work for same customers as are now corp's for work he did in previous year without additional compensation and few independent minor jobs for which he was paid directly. Originally deducted truck expenses on Sch. C which IRS completely denied due to inability to segregate driving purposes for corp as employee vs. ind. contr. to same job locations.
Shouldn't they at least allow deduction to extent of income?
After 10 months of wrangling and numerous managers, IRS finally allowed truck expense deductions to the extent of Sch. C income saving client thousands of potential tax dollars and penalties, without agreeing to technical correctness but rather to get it off their desks ! Thank you IRS !
