Whether a business is small or large, one of the things that is considered as the basis of success is the happiness of the customer or your client. This especially true if you are in a sales oriented company (who is not!). The happiness of the client makes all the difference. So it's only fair that the entertainment of the clients by the company is considered to be serious business. Things like golf trips, trips to casinos, eating at expensive restaurants, and tickets to your client's favorite sporting events are frequent activities on the company bill.
The deductions are at 50% limit. That means if your client spent $1000 for tickets to the opera for his client, and was discussing business with them while at the opera or even if he wasn't discussing business with them but it somehow may have a effect on your client's business in the future, $500 of those $1000 are tax deductible. This also applies to any kind of meals that your client takes during this time.
If your client is an employer, use form 2106, or form 2106 EZ to report business entertainment expenses. If he is an employee of the company, you can deduct for expenses that he incurred while doing his job only if his boss doesn't reimburse him for these expenses. Such deductible expenses include any expenses your client incurred while doing his job, including the use of his car.
Deductions can only be claimed on products that are sold to a client at face value or you can only deduct the amount of the product that is face value. For example, he buys two baseball tickets for a buddy of his that happens to also be a very important part of a corporation that he is making an alliance with. They are $125 seats but because it's for Yankees vs. Red Sox, he got them for $500 each. He sends an employee with them that also happens to be friends with the corporate guy. When it comes to filing taxes all you can claim as deductible is $125, even though it cost him $1000 for both tickets.