Tax Question

I'm not a CPA but I have owned a small business.  The following article might be of use. 

http://www.quicken.com/cms/viewers/article/taxes/52210

I would be careful though in how and what you document.  Depending on how you document this could become income (non-taxable, IRS publication 525) to your co-worker because it's payment for work performed and then instead of a deductible meal (which is only 50% of it's cost anyway) it's back to lunch as usual.

I'm sure it won't be difficult to come up with a legitimate reason that you met with this co-worker over lunch but this is one of the areas that the IRS gets real picky with.  I doubt they will be looking for problems with $20.  My guess is that the value of doing this is not worth the headache of deducting it because of the "reasonable and customary" rule.   I always hated going through this issue so almost never deducted these things.

Maybe a real accountant will see this and post at least it's a bump.