Trying to meet the IRS requirements for your Augusta Rule meetings? Here’s the one question every business owner asks: How long does the meeting need to be?
Tax attorney John Hyre explains why 4 hours and 1 minute isn’t just cutting it close, it’s creating a narrative the IRS can rip apart. Learn the smarter (and safer) way to structure your meeting days so your tax-free income holds up under scrutiny.
In this video:
What actually counts as a “business day”
Why the 4-hour rule matters, even if it technically doesn’t apply
How IRS agents think (and what they look for)
The #1 tip for staying audit-ready without overcomplicating things
Want your meetings to be fully compliant, without doing it all yourself?
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be? Some of this is narrative. Some of
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it is sort of kind of tax law. Let’s
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cover it. In order to deduct travel,
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meals, lodging, you generally have to
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have a business day. What’s a business
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day? 4 hours and 1 minute officially.
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Now, I don’t recommend people spend
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merely 4 hours and 1 minute so that they
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have a business day and they can deduct
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meals, lodging, and travel because it’s
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cutting it too close. Being that cutesy,
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putting on a form somewhere, oh, I spent
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4 hours in 1 minute.
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That is not a good narrative. That might
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get an agent to think, oh, wise guy.
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Maybe the agent inquires, well, did you
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do something personal like go potty for
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2 minutes? Ah, now we’re under 4 hours.
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That’s what happens when you cut it
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close. Give yourself some margin. Does
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that rule, the business day rule apply
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here? No, not directly. but it does
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indirectly because the agents, the IRS
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agents who do the audits are used to
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that rule. So even though it doesn’t
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apply in this context, treat it as if it
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does. Second, just in general narrative,
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what would a business really do? Do
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normal businesses aside from the
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government pay for an entire day and
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then spend a tiny amount of time
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actually using what they paid for? No,
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that’s not how it works. It’s a terrible
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narrative. This is all about building
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the narrative, being the one who the
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audit ends well for or god forbid it
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goes beyond the audit. The IRS lawyer
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decides we don’t want this one. Throw
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this one back. We don’t want to deal
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with it. So the narrative matters.
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Spend, I would say, at least 5 hours.
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Let’s not get cute and close 4 hours and
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1 minute. Let’s do what a business would
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do, which is spend the majority of the
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day because they paid for the whole day
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doing business and having a real
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meeting.
