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Under tax law, businesses can generally deduct advertising and marketing costs that help bring in and keep customers. However, the expenses must be “ordinary and necessary” to be deductible. An ordinary expense is one that’s common and accepted in the industry. And a necessary expense is helpful and appropriate for the business. In a recent U.S. Tax Court case, an attorney argued he could deduct over $303,000 spent on car racing as advertising for his law firm because the firm sponsored the car. The IRS disallowed the costs as not ordinary and necessary. The court agreed, stating that the taxpayer’s primary motive for incurring the expenses wasn’t to promote his law firm. (TC Memo 2023-18)...