Question

My wife and I are being audited by the IRS for her miscellaneous expenses related to her job as a real estate sales professional.

The IRS examiner disallowed her miscellaneous expenses because she has

no written statement that says those expenses were ordinary and necessary for her sales duties, and

no listing of what expenses she is required to pay in regard to her employment.

The examiner indicated that to be considered valid, the policy or statement has to be dated for the tax year under audit and signed by an officer of the company.

Can you give us guidance on what should be included in the statement of what is “ordinary and necessary” and what she is required to pay as a self-employed real estate sales professional?

She is not reimbursed for any of her expenses.

Can you also tell me whether the IRS examiner, in referring to the officer of the company, means her broker at Coldwell Banker or my wife as the sole owner of her realty business? ... Log in to view full article.