I don’t see how the IRS can object to a bad debt deduction.
More info posted by @mjkuhn and it looks like there was an offer for rescheduling the original trip. So it's looking less and less like a bad debt and also less like theft. If there was no clause providing for a refund in the contract.......if there even WAS a formal written contract......it looks kind of hopeless in terms of any kind of a tax deduction.
