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Originally Posted by Mark T. DeNucci, Sr.
Bob:
I think the correct ruling is that a Schedule C business must show a profit two out of the last five years. BUT, that is not how the IRS applies the rule. Back in 1996, at the ABL officiating tryout camp, I officiated with an IRS Agent who worked in the IRS's Headquarters in Washington, D.C. He told me that the IRS looks at the type of buiness and the amount of gross income is being generated.
As example, a person is a stamp collector and travels to stamp shows every weekend to attend stamp shows. The stamp collector trades and sell stamps at these shows. Every year the stamp collector shows gross income between $300 and $500, but shows a taxable loss every ear in excess of ten times his gross income. That would bring out the red flags. The IRS would consider this a hobby and not a business.
Officiating of amatuer sports is a travel intensive buiness and the IRS understands that. I have had a few years when I have had a taxable profit, but more often that not I have a taxable loss and I have been filing Schedule C's for over 25 years.
MTD, Sr.
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Ya know, I'm sorry, but if your travel is eating up all of your game fees, something is wrong with this picture. I mean, I know none of us are in this to get rich, especially if we're just doing high school levels and below. But realistically, you should be making more money per game, at least most of the time, than it costs you to get there and home.