Under limited circumstances,
Over the years, the tax laws
have been modified to prohibit what the Congress (perhaps prompted by
regards as an abuse of certain beneficial provisions of the tax law.
these provisions was the deduction that was permitted for educational
including the cost of attending a seminar or convention and the related
costs. Numerous restrictions have been imposed to the point where being
get a deduction for some or all of the costs of attending a seminar or
convention outside the
In order to better understand the type of educational programs that are still deductible, it will help to briefly review some of the education/seminar expenses that are no longer deductible. Discussing these exceptions first also reduces the need to introduce a confusing list of exceptions later in this discussion.
No Investment Expense Seminar Deductions After 1986
Prior to the Tax Reform Act
of 1986 (86 TRA), a lot of investors enjoyed tax deductible vacations
popular resorts both in the
Itemized Deductions Must Exceed 2 Percent of Adjusted Gross Income
Another change introduced by the 86 TRA was the elimination of miscellaneous itemized deductions to the extent of 2% of adjusted gross income . Deductions for investors and employees fall into this category. Deductions for the self employed are not treated as itemized deductions.
Employees sometimes incur expenses relating to their job. Some employers inform employees that their salary or commission includes compensation for such expenses. Expenses that are not reimbursed under what the IRS calls an “accountable plan"  can be deducted by the employee as a miscellaneous itemized deduction – subject to the limitations on such deductions.
However, if an employer reimburses the employee for the exact amount of expenses, the employee may exclude the reimbursement from income and is not subject to the restrictions for miscellaneous itemized deductions. An accountable plan is basically a plan whereby the employee accounts for all of the expenses and receives a reimbursement of those specific expenses. An “allowance” to be used for unspecified travel expenses is not an accountable plan for this purpose.
Limits on Deducting Meal and Entertainment Expenses
The 86 tax law also introduced a provision that limited business meal and entertainment deduction expenses to 80% of the amount spent after 1986.  This was reduced to 50% by the Omnibus Budget Reconciliation Act of 1993 for tax years after 1993. This rule applies to investors, employees, employers and the self employed. If an employee (or independent contractor) is reimbursed for meal expenses, the limitation applies to the employer.
Limits on Itemized Deductions by the Alternative Minimum Tax
Although introduced before 1986, the AMT is a system of computing the income tax without the benefit of many types of deductions – including miscellaneous itemized deductions of employees and investors. Thus, for higher income taxpayers employee expenses and investment expenses may be deductible for the regular tax but not for the AMT.
Combining Business and Personal Travel
The general rule is that travel expenses incurred for business are deductible.  but personal travel costs are not. When a trip is taken for both business and personal purposes, the issue is whether the primary purpose of the trip was for business. Whether the primary purpose is business or personal depends on the facts and circumstances. However, in most cases, the number of days of business activity versus the number of days of personal activity can be used to make that distinction. And, for domestic travel, travel days and non-business days (weekends and holidays) are counted as business travel days.
Travel Expenses for a Spouse or Children
The travel costs of a spouse or child are not deductible. But if the travel is by car, then it costs the same for a family of four as for the taxpayer. And if the cost of lodging is the same for one person as for two or more, then the lodging cost is still deductible. But air fare for a spouse or children would not be deductible and the cost of an extra room for older children would not be deductible.
One of the more contentious issues involves the question of whether the travel expenses of a spouse can be deducted if the spouse is involved in some manner in the business activity. Generally, mere clerical or social activities by the spouse is not sufficient. The basic test is whether the travel by the spouse would be deductible without regard to the travel or business activity of the taxpayer 
Special Rules for Expenses of Investigating a Business Acquisition
The expenses incurred in doing due diligence relating to the acquisition of a new business are not deductible if the business is acquired.  Such costs must be capitalized and may be amortized over a period of 15 years.  However, if the business that is being evaluated is not acquired, the business can deduct the due diligence costs as a business loss.  This rule only applies to someone already engaged in a related trade or business. If a taxpayer is investigating a new kind of business, and then abandons that effort, the expenses are not deductible. 
Special Rules for Foreign Travel Expenses
For domestic travel, some travel and lodging costs may be deductible even if the primary purpose of the trip is personal. If the primary purpose of the trip is for business, it is not necessary to allocate the travel costs between personal and business. In addition, week ends, holidays and travel days are not counted as personal days.
With foreign trips, the
rules are a lot more restrictive .
For travel outside the
But there are exceptions to this harsh rule.
Special Rules Apply to Foreign Convention Expenses
As mentioned earlier, the costs of attending seminars or conventions that are related to investment or other non-business purposes are not deductible. But expenses that are ordinary and necessary in the trade or business of a taxpayer are deductible as business expenses. For an unincorporated business, they would be deducted on Schedule C. Where the taxpayer does business through an entity such as partnership, taxable corporation or sub S corporation, the expenses are paid and deducted by the entity.
Deductions are not permitted for expenses incurred for a convention, seminar or similar meeting outside the North American area unless the purpose of the meeting is directly related to the conduct of a trade or business of the taxpayer. Furthermore, it must be as reasonable for the meeting to be outside the North American area as to be within it. 
Further Restrictions on Cruise Ship Conventions
A limited deduction of up to $2,000 per taxpayer is permitted for attending a seminar or convention on a U.S. flag ship if the taxpayer can show that the meeting is directly related to the trade or business of the taxpayer, and the taxpayer attaches a statement showing the number of days of the trip, a schedule of the program activities (presentations), and a statement that must be prepared and signed by an officer of the organization or group that sponsors the meeting.
Who Can Deduct Seminar Expenses Outside
At this point a lot of readers might be wondering “what’s left?”
The answer depends partly on the nature of the program and the type of audience for whom it is intended. The program must have some direct bearing on the trade or business of the taxpayer who is paying for the expenses.
A conference on
international money laundering might be targeted at lawyers, bankers,
executives, financial brokers, and anyone else who is in a business
satisfy various know your customer rules. Because money laundering is
international problem, such a program could be directed at an
audience and could be held anywhere in the world. If the organizers and
the speakers are not from the
A conference on computer security technology developments would be likely to appeal to an international audience and would probably have an international mix of speakers. Anyone involved in a business that was affected by computer security issues could have a good reason to attend.
An investment conference on international investing might be deductible by trust officers, investment advisors or brokers, financial planners, lawyers who advise on such matters, tax accountants and others in businesses relating to the subject matter of the conference should be able to deduct their registration fees and travel costs.
There are some types of occupations where the subject matter of the conference does not have to be as closely related to their occupation. Examples include reporters, authors, editors and publishers. And those who manage, organize or sponsor such conferences have a clear business purpose to attend their own programs.
These examples are only
intended to be illustrative of what the law appears to permit and are
on any authoritative source such as the tax code or IRS regulations or
Whether any particular person can deduct the costs of attending any
seminar or convention outside the
More Information About Deducting Seminar Expenses
CAUTION: This article is not an authoritative source of information about the tax rules that apply to deducting the costs of attending and travel to a foreign seminar or conference. Only the Internal Revenue Code, applicable IRS Regulations and rulings, and applicable court decisions may be construed to be an authoritative source of tax law. Nor is this article intended to be construed as a “covered opinion” as that term is defined by IRS regulations in Circular 230.
This article does not attempt to provide a comprehensive review of all the potentially relevant tax code rules, regulations and court decisions that might apply to the subject. Taxpayers therefore may not rely on this information as a basis to avoid potential penalties for negligence or other issues that may be imposed by the IRS.
Taxpayers should not rely on this information without consultation with a tax professional that is familiar with the specific facts and circumstances of the taxpayer’s trade or business.
 Expense deductions for investors are governed by IRC section 212
 TRA 86 Act section 142(c ); IRC Section 274(h)(7) modified IRC Section 212
 Deductions for trade or business expenses are governed by IRC section 162
 TRA 86 Act section 132(a) & (b); IRC sections 62 and 67
 IRC 62(c ); See http://www.jkmcpa.com/AcctPlan.html
 TRA 86 Act section 142(b); IRC section 274(n)
 Reference to “higher income” taxpayers refers to the adjusted gross income of the taxpayer rather than to the taxable income under the regular tax computation. For the year of 2005, the AMT would not apply to a single taxpayer with an adjusted gross income of $40,250 or less or to a married couple filing jointly with an adjusted gross income of $58,000 or less.
 IRC section 274(m)(3)
 IRC section 195(a)
 IRC section 195. Note that this section permits a current deduction for start up costs that do not exceed $5,000
 Revenue Ruling 57-418 and 77-254
 IRS Regulation 1.274-4
 Revenue Ruling 63-144
 A list of countries in the North American area are included in Revenue Ruling 2003-109.
 IRC section 274(h)(2)
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