Article
One common misconception about using the Augusta Rule with your business is that you need employees to use it.
You don’t.
A business without employees may still have legitimate reasons to bring people together for in-person meetings.
Who Can Attend an Augusta Rule Meeting?
The answer depends on what your business does and who you regularly work with.
Your attendees could include:
- Clients or customers
- Prospects
- Business partners
- Contractors
- Advisors
- Vendors
- Referral partners
- Investors
- Other professionals you work with
For example, a consultant might hold a client strategy session. A real estate investor might bring together partners and advisors for a deal review. A coach might conduct an in-person client workshop.
None of these businesses necessarily needs employees to have a legitimate reason for an in-person business meeting.
How Many People Need to Attend?
The tax code does not specify a minimum number of attendees for an Augusta Rule meeting.
However, there is an important practical consideration: Does it make sense for the business to rent a separate venue for this meeting?
Sitting by yourself and working alone is difficult to justify as a legitimate need for separate meeting space. The same concern can arise when only one other person is meeting with you.
For meetings covered by our IRS Audit Defense, we require at least three people to be physically present. This is our conservative risk management standard, not a specific attendee requirement found in the tax code.
Worth noting: a married couple together counts as one attendee.
The Meeting Still Needs to Make Business Sense
Having enough attendees alone does not make a meeting eligible.
There should be a legitimate business purpose for bringing those people together, and the meeting should be substantial enough that paying to rent an appropriate venue makes sense for the business.
That means having a meaningful agenda, sufficient meeting duration, and contemporaneous documentation showing what actually took place.
The goal isn’t to create meetings just so you can rent your home to your business. Look at the meetings your business already has and determine whether your residence could appropriately serve as the venue.
No Employees Doesn’t Mean No Augusta Rule
Solo consultants, coaches, real estate investors, advisors, and other owner-operated businesses may have plenty of legitimate opportunities for in-person meetings, even without traditional employees.
Your business structure still matters. Sole proprietors and single-member LLCs that have not elected to be taxed as an S corporation or C corporation cannot use the strategy to rent a residence to themselves.
But if you have an eligible business structure, having no employees doesn’t automatically take the Augusta Rule off the table. Clients, contractors, advisors, prospects, business partners, and others you already meet with may all be part of legitimate business meetings held at your residence, for a deduction.
