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DCMom 07:24 AM 04-16-2012
I would be surprised if that were true. I found this on the IRS website in the Child Care Provider Audit Technique Guide:

http://www.irs.gov/businesses/small/...206004,00.html


Time Percentage (Form 8829 Part I lines 4-6)

The time percentage is the total number of hours the facility was used for the child care business during the year (the numerator) divided by the total hours in the year (8,760 hours). The provider should record how the total hours the facility was used, was computed. Hours spent cooking, cleaning, and preparing activities for the business of child care could be included in the calculation of the numerator of the time percentage if the tests for deduction under IRC Section 162 (ordinary and necessary expenses) are otherwise met under the facts of the particular case. As illustrated in Revenue Ruling 92-3, one hour is added to the 11 hours of actual day care operation for the ½ hour before and ½ hour after regular hours spent preparing for and cleaning up after the children.

Note to Examiners: The Revenue Ruling example is not an absolute rule. The time outside of the regular hours to be added can be more or less depending on the facts and circumstances in each case, which need to be evaluated in line with Section 162 (ordinary and necessary expenses). Some providers, because of the type of service provided and/or ages of the children, might spend more time preparing activities for the children than others and vice versa. In addition, some preparation work might be done on the weekends. Recordkeeping time can also be included. Often a provider will keep a detailed log of his/her activities for a significant part of the year. This detailed record keeping of the time spent and tasks performed is essential to provide the details needed by the examiner to make an informed determination under Section 162, so it is highly recommended that all providers keep such logs. Ultimately, examiners should make a decision based on the facts and circumstances of each case.

The part in red is what I do in the event of an audit. I think mayber her CPA didn't read the ENTIRE update...?
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