Page 363 - Small Business IRS Training Guides

Prior Tax Law

IRC 274 is a disallowance section describing various expenses or aspects of expenses that are not allowed as

deductions, including items of:

1. Entertainment,

2. Amusement,

3. Recreation,

4. Travel,

5. Conventions,

6. Facilities, and

7. Employee achievement awards.

Prior to the revision, IRC 274(j)(3) defined the term “employee achievement award” as an item of tangible personal
property which is:

• Transferred by an employer to an employee for length of service achievement or safety achievement,

• Awarded as part of a meaningful presentation, and

• Awarded under conditions and circumstances that do not create a significant likelihood of the payment of
disguised compensation.

The new tax law expanded the definition of “tangible personal property” as described in IRC 274(j)(3).

73233-102 13310-3 Tax Cuts and Jobs Act