IRS Releases Final Regulations On Entertainment Expense Allowances

The Internal Revenue Service issued final regulations July 31 that affect taxpayers that pay or receive advances, allowances or reimbursements under entertainment expense allowance arrangements.

T.D. 9625 amends regulations under tax code Section 274(e)(3) and provides rules for the exception under Section 274(e)(3) to Section 274(a) and (n) deduction limitations for certain expenditures paid or incurred under reimbursement or other expense allowance arrangements, IRS said.

The final regulations also clarify the definition of reimbursement or other expense allowance arrangements under Section 274(a) and (n) and how the deduction limitations apply to reimbursement arrangements between more than two parties, IRS said. ...