Use this checklist to avoid the most common mistakes made in filing child care tax returns, particularly in the area of deductions. Provider wins case. IRS Audits Minnesota IRS auditor denies deductions for toys and other items because provider has only canceled checks and not receipts. Case is won on appeal. IRS Audits Minnesota IRS auditor denies deductions for the business use of a piano and camcorder.
Provider wins after showing piano books and other records.
Provider also wins deduction for a portion of her second phone line used in her business. Tax Court Case Simpson Tax Court Case deals with a new provider claiming many unreasonable expenses for her business. But the Court does state that cable TV and water is a legitimate business expense. Neither Redleaf National Institute, Tom Copeland, Redleaf Press, nor Resources for Child Caring are engaged in rendering legal, accounting, or other professional services. If you require legal or expert tax assistance, obtain the services of a qualified professional.