Posting It Does Not Make It Deductible: A Tax Court Warning for Gig Workers and Social Media Influencers

The taxpayer’s business activities

The taxpayer operated an LLC with three reported activities:

• Providing transportation services
• Buying and reselling event tickets
• Developing a social media influencer business

The celebrity experiences

He had hundreds of thousands of followers by the time of trial. However, during the tax years examined (2019 through 2021), he earned little or no revenue from the social media influencing business. Most of the LLC’s income came from transportation services.

The taxpayer paid substantial amounts for celebrity events and experiences, including:

• - $10,000 for two Grammy tickets
• - $8,912 to meet Benedict Cumberbatch
• - $4,151 to meet Matt Damon
• - $2,600 to meet Mark Ruffalo
• - $6,500 to attend a Tiger Woods charity event
• - $831 to catch a pass from Drew Brees
• - $779 to return a serve from John McEnroe

Why the Court disallowed the expenses

He photographed or recorded these experiences and posted the resulting content on social media. Some posts increased attention and engagement, but the Court still disallowed the expenses.

IRC Section 162 generally permits a deduction for expenses that are ordinary and necessary in carrying on a trade or business. IRC Section 262, however, prohibits deductions for personal, living, and family expenses.

When an expense has both business and personal characteristics, the taxpayer must demonstrate that its primary purpose was business.

The Court acknowledged that the celebrity posts generated attention and could provide a future business benefit. However, it concluded that the payments were primarily made to obtain desirable personal experiences, not primarily to operate or market an established business.

Business benefit is not enough

An expense may benefit a business without becoming a deductible business expense. Consider these examples:

• Posting vacation videos does not automatically make the vacation deductible.
• Wearing clothing in promotional photographs does not necessarily make the clothing deductible.
• Reviewing a restaurant online does not automatically convert a personal meal into advertising.
• Livestreaming a concert does not necessarily make the concert ticket a business expense.
• The taxpayer must establish why the expense was incurred—not merely show that content was created afterward.

Bank statements are not enough

The taxpayer also had a recordkeeping problem. Many claimed marketing expenses were supported only by bank or credit-card statements containing merchant names, usernames, payment processors, or transaction numbers.

Those records proved that payments occurred, but they did not establish:

• What was purchased
• Who attended or used the item
• The business purpose at the time of purchase
• How the expense related to an income-producing activity
• Which content, campaign, sponsor, or client benefited from it
• The Court disallowed the claimed marketing expenses and sustained accuracy-related penalties.

What creators and gig workers should do

Before claiming an expense, consider whether you would have incurred it without the business. If the answer is yes, the expense may be primarily personal.

For potentially deductible expenses, maintain:

• The original invoice or receipt
• The date, amount, and description of the purchase
• A written explanation of its business purpose
• The related contract, campaign, sponsor, client, or revenue source
• Evidence showing how the expense was used in the business
• A reasonable allocation when an expense has both business and personal use

The key takeaway

Creators should also maintain separate business bank and credit-card accounts. However, paying an expense from a business account does not, by itself, make it deductible.

This case does not mean that influencers cannot deduct legitimate content-production or marketing expenses. It means that influencers are subject to the same tax rules as every other business owner.

The expense must be primarily business-related, ordinary and necessary for the business, and adequately documented. Calling an expense marketing—or posting it on social media—does not change its underlying personal nature.

Full Tax Court opinion: https://storage.courtlistener.com/pdf/2026/08/18/suleiman_sami.pdf

This article provides general tax information and is not intended as individualized tax or legal advice. The deductibility of an expense depends on the taxpayer’s specific facts, business activities, and supporting records.