I'm a CPA, and USED TO do taxes a few years back.
AS I recall...
"Hobby expenses" are NOT deductible.
Now, you can claim that you are in business, and deduc expenses greater than your income. BUT, in order for the IRS to recognize this activity as a business, it must be engaged in "for a profit."
Easy enuf to prove, right???? NOT TO THE IRS. The IRS defines "engaged in for a profit" as a business that actually SHOWS a taxable profit in 3 out of any 5 consecutive years.
Were you to dedust these expenses, and NOT meet that rule, the IRS will disallow the deductions, and come back at you asking for the back taxes PLUS penalty and interest. that would be FIVE YEARS of accumulated interest, and could exceed the actual tax by a multiple of 3 to 5 times the tax. OUCH.
You friends tax preparer is probably doing some creative accounting to get those deducted.
That said, here's theule I live by....
If ANY expense could reasonably be interpreted as deductible BY A REASONABLE PERSON, go ahead and deduct it. make the IRS come back and prove otherwise. IRS regs are VERYconfusing, and subject to interpretation. And as we all know, GOOD PEOPLE can disagree on the interpretation.
One piece of advice, tho - don't spend the tax savings. Make sure you've got the money to repay the IRS, should they come looking for you.