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Tax Law

Car-racing costs can’t be deducted by lawyer as marketing expense, 10th Circuit rules

By Debra Cassens Weiss

December 11, 2024, 8:48 am CST

A solo personal injury lawyer can’t count the costs of car racing as a marketing activity, a federal appeals court ruled Monday.

The 10th U.S. Circuit Court of Appeals at Denver ruled against lawyer James William Avery, who sought to deduct more than $300,000 in expenses incurred in car racing, Law360 reports.

Avery moved to Indiana from Colorado in 2003. He continued to practice law in Colorado, but he hoped to boost his practice in his new state, as well, the 10th Circuit said in its Dec. 9 order and judgment.

To market his practice, Avery began to participate in car shows in Indiana and then tried his hand at car racing. Avery’s Dodge Viper, bought for more than $100,000, had a decal for his law firm on the back, he said in his appellate brief. The webpage for his “Viper racing team” was linked to his firm’s Facebook page.

He raced in at least seven states, including Indiana and Colorado.

But the costs of car racing were not an ordinary and necessary business expense for attorneys that can be deducted, the U.S. Tax Court ruled in February 2023. The 10th Circuit upheld the conclusion.

The Tax Court had found that Avery “greatly enjoyed car racing, which he found more exciting than his previous hobby of acquiring collector cars and participating in car shows. But we find that both activities were hobbies. No deduction is allowed for personal expenses of this kind.”

Avery had argued that the Tax Court should not have considered enjoyment of his marketing activity in its ordinary-and-necessary analysis. Doing so, he argued, could lead to a situation in which expenses incurred for a work vehicle would be deemed to be personal expenses simply because a taxpayer enjoys driving the vehicle.

The 10th Circuit said it isn’t obvious that the Tax Court actually considered Avery’s enjoyment of car racing as a factor in its analysis.

“But even if we read the Tax Court’s decision as Mr. Avery does, we see no error in considering personal enjoyment as one factor among others,” the 10th Circuit said.

Avery did not immediately respond to an ABA Journal request for comment sent to an email address listed on his appellate brief. Nor did he respond to a voicemail left at a number listed on the brief.

The case is Avery v. Commissioner of Internal Revenue.

Writing plays an expanding role in the evolving legal marketing world, and lawyers have much to learn. We must pivot to produce easily digestible content. To effectively market ourselves and our law firms to clients through law alerts, blogs or other methods, we must stop writing like lawyers and start writing like marketers, journalists or speechwriters.

Directions for doing so abound: Write for an audience of eighth graders, focus on SEO optimization, avoid citations, format with bullet points, etc.

These suggestions add value. That value is limited, however, by a foundational flaw. Advising lawyers to write simplistically and formulaically misses the mark. It fails to recognize that clients hire us because we are legal experts, not because we are marketing experts. When we oversimplify to improve marketability, we strip legal content of the nuance our clients and potential clients expect us to incorporate into our practice. With that in mind, there are several ways to integrate marketing guidance into our writing while still performing our roles as lawyers.

Legal writing training begins in law school, as ABA accreditation criteria includes faculty-supervised first-year and upper-class writing requirements. Many schools add more substantial demands, including writing major articles and papers with extensive one-on-one faculty supervision. Academic journal writing and editing is another format for jargon added to the mix. This education, built upon post-graduation at firms around the country, creates attorney writers.

Some are so well-trained that they cannot help themselves from placing errant commas where none belong or adding unnecessary modifiers for yet further clarification of a three-line email. Nor can they stop themselves from capitalizing the words “plaintiffs” or “defendants.” (Practical note: Capitalize parties in court documents, not articles or blogs.)

Gifted citation checkers, perhaps, many attorney writers are like classically trained chefs who struggle to make a simple grilled cheese sandwich. They command the capacity to communicate with complex legalese but cannot distill legal intricacies into plain English.

And that is where change is required. Taking into account our expertise and understanding of the law, we have to learn how to share our knowledge. That does not mean understating complexities or habitually circulating information following often inapplicable conventions. Instead, we should think through each communication—its intention, substance and implications—and plan accordingly.

Leverage marketing insights

Assuming that you share your legal knowledge and experience without oversimplification, advice from marketing experts—in-house at your firm or outside consultants—can be worthwhile and immensely useful. Here are a few ways to embrace marketing advice without leaving your legal training behind.

1. Show, don’t tell

This old writing adage rings true for lawyers. You cannot advertise yourself as an “expert” without violating professional ethics rules, so use your writing to show your expertise. Include legal jargon and explain it. Breaking down complex legislation or regulations into digestible content will demonstrate your mastery of the materials. For an extra challenge, show that mastery. Graphics, charts and flow diagrams double as effective ways to explain complexities and visual showcases of your expertise.

Publishing well-written, high-quality blogs and articles distinguishes you from your competitors. Many lawyers can summarize the Federal Trade Commission’s most recent rule banning most noncompetes. Still, it takes more experience to successfully address related, more complex questions: How does the rule impact forfeiture provisions and clawbacks—particularly related to ERISA plans? As part of the executive branch, does the FTC even have the constitutional authority to regulate contracts?

2. Use active voice

Passive voice is not a grammatical concern, but it complicates sentence structure and adds extra words. Compare these sentences:

  • “Passive voice is to be avoided by legal writers who wish to achieve success.”

  • “Successful legal writers avoid passive voice.”

All writers benefit from replacing a passive voice with an active one (most of the time), but this is a particularly useful tip for lawyers. To communicate effectively, we should focus on writing simpler sentences—in structure, not content.

The active voice conveys directness and strength, both of which clients and potential clients want to see in their lawyers. Limiting the passive voice will help you demonstrate those qualities in your writing.

3. Know your audience

Clients hire lawyers who are well-prepared and considerate of their time. If you do not take the time to learn about your audience and write accordingly, you will have wasted your clients’ time.

If your distribution list includes primarily general counsels of national REITs, discuss important caselaw and address legal intricacies that they, as attorneys with expertise, will understand and appreciate. Provide links to cases, and consider addressing compelling arguments raised in concurring and dissenting opinions. They will likely appreciate the analysis and the mastery that you convey.

If you are writing for nonlawyers, engaging in esoteric legal analysis may be a waste of their time and yours. But do not treat your nonlawyer readers like they cannot understand legal issues. They can if you explain the issues well. It is your job to represent your clients’ interests, and educating them is an important aspect of that job.

Always use the correct legal terminology (including Latin words), and include definitions where necessary. Give your clients the credit they deserve for being intelligent and educated experts in their fields.

So write for eighth graders when preparing for middle school career day, but write for sophisticated real estate investors when explaining the implications of New York City’s rent regulation laws to institutional clients.

Do not keep a tally of SEO keywords when you write an explanation of the city’s updates to those regulations. While there is a possibility that discounting SEO may impact the analytics of your blog and your ability to reach those seeking content with Google searches (which should be explored further given Google’s March 2024 core update’s impact on SEO keywords—a subject for another column), you are writing to inform your clients. Producing helpful content geared toward those clients will make you a marketing success.

Circling back

In sum, identify your readership and understand the law to communicate effectively. Explain where appropriate but continue to write like a lawyer. And like a classically trained chef simplifying a grilled cheese sandwich, slightly alter the complexity of flavor based on ingredients and customer preferences. But do not use the microwave.

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Jessica Kaplan is the founder of Legally Penned. A 2001 graduate of the University of Pennsylvania Carey Law School, Kaplan is a litigator-turned-wordsmith providing content and editing services tailored specifically to lawyers and law firms.

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Mind Your Business is a series of columns written by lawyers, legal professionals and others within the legal industry. The purpose of these columns is to offer practical guidance for attorneys on how to run their practices, provide information about the latest trends in legal technology and how it can help lawyers work more efficiently, and strategies for building a thriving business.

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Interested in contributing a column? Send a query to [email protected].

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This column reflects the opinions of the author and not necessarily the views of the ABA Journal—or the American Bar Association.