Vehicle and Marketing

[ProActive Bookkeeping Consultant]

I have an S-Corp client who has a real estate business.  They wrapped their personal truck, which we already deducting that expense as advertising, but now they are trying to argue they can have their business make the truck payment and have it deducted as marketing/advertising. Supposedly they "googled it" and found they are allowed to do this.  I'm going to contact them to send me this google information they found.

I have provided guidance to them on this once before and told them, that is not the tax guidance.  They should be tracking their business mileage and then have the company reimburse them for the mileage if they want to just use standard mileage reimbursement.  I also looked in Pub 463 and in Chapter 4, it specifically states advertising on your vehicle doesn't change the use from personal to business and still cannot deduct expenses for the use. 

Is there some other tax reference I am not finding that would entitle them to have their S-corp pay their personal truck payment and classify it as "marketing"?

[IRonMaN]

No, you are right, they are wrong.  If they don't want to listen to you, tell them to have Google prepare their return.  Life is too short to fight with some people.

[dascpa]

I didn't know Google prepared returns.  Is it better than Drake, ProSeries and Lacerte?  What are their prices? What about customer service?  I'm all excited now.

[BobKamman]

They can use Google to find a more pliable preparer.  Then what IRS does a project on that one, they can use Google to find yet another one.  

[qbteachmt]

"but now they are trying to argue they can have their business make the truck payment and have it deducted as marketing/advertising."

I got this question in every business financial management class. I pointed out that if they Park the vehicle, they can take Actual Operating Expenses (which is pretty much $0) as a billboard. If they intend to use it as a vehicle, it falls under vehicle rules.

And of course, they can deduct the signage, under the rules for something of that cost and useful life.

"Is there some other tax reference I am not finding that would entitle them to have their S-corp pay their personal truck payment and classify it as "marketing"?"

They can have their S Corp pay them anything they want to, subject to if there is another shareholder-employee who has difficulty accepting the reality of your client paying themselves outrageous payroll, of course. They don't need "tax rules" to follow, to set their pay at "whatever I want it to be, as long as I don't bankrupt the company." And that caveat never stopped some people, anyway.