There is more to this than meets the eye. There is something she is not telling you, or something you are not telling us.
I am a CPA** and the expenses you are describing meet the definition of ordinary and necessary business expenses which are commonly allowed in her line of business.
I cannot believe the IRS would summarily disallow those expenses.
If the situation is accurately related per your synopsis, I would suggest you counsel her to ask her CPA to recommend a tax attorney. I then suggest she pays for a consultation with that attorney, plus 2 other tax attorneys (ask for referrals from friends and acquaintances), then selects the best attorney to fight on her behalf, which could be lengthy and quite expensive unfortunately.
**disclaimer – I am no longer in public practice and do not give specific tax advice.
