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An audit of a grocery store business resulted in fines & penalties for the business because an employee allowed a customer to purchase products that were not allowed to be purchased with food stamps. Under these circumstances would these fines & penalties be an allowed deduction on Schedule C.
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I vote no. Violations of law produced these fines & penalties and they are not deductible.
Answers are easy. Questions are hard!
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Who did the audit? How did they come up with the amount owed? Was it the Department of Agriculture, and they said "you sold $500 worth of stuff that did not qualify, so you owe us $500?" That's called restitution, and it's deductible.
Sometimes facts are useful before jumping to conclusions.
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No jumping here. Someone said their client paid fines and penalties. I'll take them at their word rather than play Jeopardy and pick a question rather than an answer.
Slava Ukraini!
