Race Car Costs Don’t Qualify for Advertising Tax Break, US Says

A Denver personal injury lawyer shouldn’t be allowed to deduct $303,000 spent on his car racing hobby as an advertising expense for his practice, the US government told a federal appeals court.

James Avery appealed after failing to convince the US Tax Court last year that his expenditures should be deductible. The US responded to his appeal on Wednesday, defending the Tax Court’s decision to disallow the deduction and not remand to the IRS Appeals Office for another hearing.

“Car-racing expenses are not normal or common in a personal injury law practice such as taxpayer’s,” the government told the US ...