Argument for Deducting Golf Lessons as a Business Expense

While the IRS generally classifies golf as entertainment under Section 274, there is a compelling argument that golf lessons could be deductible under the right circumstances, particularly if they are essential to business development and client interactions. This argument is supported by principles from the accounting firm Titus & Urbanski and the Bradford Tax Institute, which emphasize that expenses should be deductible if they are both ordinary and necessary to one’s trade or business.

1. The “Ordinary and Necessary” Business Expense Standard

Under IRC Section 162, a business expense is deductible if it is:

• Ordinary: Common and accepted in the industry.
• Necessary: Helpful and appropriate for the business, even if not indispensable.

Application to Golf Lessons:

• If a professional frequently conducts business on the golf course (e.g., financial advisors, sales executives, real estate professionals), golf lessons could be argued as a necessary business expense that enhances networking and deal-making capabilities.
• Titus & Urbanski, a CPA firm, argues that if an activity is directly tied to income generation, it may be deductible.
• They point out that self-improvement expenses can be deductible if they directly contribute to revenue generation.
• If networking through golf is a primary method of client acquisition, then skill improvement via lessons should be deductible just as public speaking or negotiation training would be.

2. The Bradford Tax Institute’s Guidance on Deductible Education Expenses

The Bradford Tax Institute specializes in helping business owners maximize deductions and has clarified that education expenses are deductible if they improve a skill necessary for business. Their framework includes:

• The skill must be directly related to revenue-generating activities.
• The skill must maintain or improve one’s ability to perform their job.
• It cannot qualify you for a new profession (which is why MBA tuition is sometimes not deductible, but professional development courses often are).

Applying Bradford’s Standards to Golf Lessons:

• If a professional frequently secures clients, builds partnerships, or maintains business relationships through golf, then improving their golf skill directly enhances business performance.
• Many professionals use golf as their primary business development tool, similar to how others rely on speaking engagements or industry conferences (both of which are deductible).
• If golf lessons maintain or improve the ability to prospect and close deals on the course, they should qualify under Bradford’s business skill improvement criteria.

3. Precedents Supporting Non-Traditional Business Expenses

While IRS Section 274 prohibits golf club memberships, it does not explicitly prohibit skill improvement expenses when the skill is a necessary part of business success.
There are precedents of non-traditional education and training being allowed as deductions:

• Tracey Topping Case (Equestrian Lessons) → Deductible because it was the only way to access her client base.
• Alan Aaronson Case (Flying Lessons for a News Photographer) → Allowed because flying improved his professional ability.

Parallels to Golf Lessons

• If golf is the primary setting for business development, then lessons should be treated similarly to:
• Sales training for a salesperson.
• Industry conference fees for a consultant.
• Public speaking courses for executives.

Thus, golf lessons could be argued as a business education expense, particularly if:

1. The taxpayer can show that a significant portion of business is conducted on the golf course.
2. The lessons help improve the taxpayer’s ability to prospect and close deals.
3. The expense is documented and justified as business-related training.

Countering the IRS’s Likely Objections

• The IRS would likely argue that golf is a recreational activity and not an essential business skill.
• However, the taxpayer can counter this by proving that golf is their primary prospecting and client relationship tool.
• Documenting how much business is conducted through golf, client meetings on the course, and revenue generated from these interactions would strengthen the deduction claim.
• It could be classified as business education rather than entertainment, particularly if the lessons focus on strategic play and performance in a business networking context rather than recreational enjoyment.

Conclusion

Using the principles of Titus & Urbanski and the Bradford Tax Institute, an argument can be made that golf lessons are a legitimate business education expense when they:

1. Improve a skill that is necessary for business development.
2. Enhance a professional’s ability to generate revenue through client interactions on the course.
3. Are documented and justified as a skill-enhancing business expense, rather than personal recreation.

While this argument is not guaranteed to succeed under audit, it is well-supported by past tax cases and could be pursued with proper documentation and tax professional guidance.