The little piles of credit card receipts on the desks of many small-business owners can mean only one thing: They're trying to figure out how much of their 2006 lunches, dinners and entertainment expenses can be deducted on their tax returns.

Meals and entertainment are a popular tax deduction with businesses. Under the tax law, a company can deduct 50 percent of the cost of meals and entertainment expenses that were incurred in the course of doing business.

But these are deductions that should be taken with discretion. Accountants say the IRS is particularly wary of meal and entertainment expenses because of the possibility of abuse, and they believe the government is likely to question any numbers on a tax return that seem out of line.

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