Funny Tax Deductions and Weird Tax Write Offs
NO, pets can't be claimed as dependents!
The IRS is Not Laughing at Funny Tax Deductions
The IRS is not known for their sense of humor, but that doesn't stop people from trying to claim some funny and weird tax deductions. From claiming a dog as a dependent to wanting a tax write off for the cost of hiring an arsonist, the IRS has seen them all. Rest assured, all of the claims below have been tried at least once. Listed below are some tax deductions that the IRS wasn't laughing about:
NO! You CAN'T Take These Tax Deductions:
A pet’s health expenses. No you can’t claim your dog’s hip replacement as a medical expense even though it did set you back $1500.
A dog (or cat) as a dependent. You can’t claim a pet as a dependent even if you do like your dog more than you like your kids. People have tried this, but they eventually get caught. Fido and Fluffy may be dependent on you, but the IRS won't give you a tax write off for them.
The wife’s new mink coat is NOT an entertainment expense just because she wears it to dinner with your business clients.
Mileage to and from the racetrack is not a business expense.
The cost of hiring a hit man to get rid of your cheating spouse just won’t pass the IRS auditors.
The cost of hiring an arsonist to burn down your failing business so you can collect the insurance. Somebody actually tried this, then ended up in jail for insurance fraud. ..and tax fraud.
The cost of sex toys as a business expense. Even though you are in the “business,” you can’t deduct sex toys as expenses for an illegal business. How do we know this? Somebody tried it, of course.
Cat food. Unless, of course, it’s a business expense (see below)
The cost of hiring a dog sitter. Hiring someone to come in and keep your dog company is not allowable as a day-care credit. Oh, yeah, it’s been tried…
The cost of your daughter’s wedding. A criminal defense lawyer found out that this is not a business expense even if you do you invite your clients.
Sperm donation as a loss. No, you can’t claim a depletion allowance on money you make from being a sperm donor. Depletion allowance is for assets like oil wells.
A nuclear fallout shelter. The guy who tried to claim building a bomb shelter as “preventive medicine” got turned down. Sorry, guy!
BUT... The IRS Did Approve These Funny Tax Write-Offs!
But here are some surprising tax deductions that HAVE been allowed. You’ll be happy to know that the IRS is not inflexible. Well, they may have been taken to court over some of them, but here are some surprising tax deductions that have been allowed
- Sex Change Operation. In 2010, the U.S. Tax Court ruled that a woman who was born a man with gender identity disorder could claim hormone therapy and sex change surgery expenses as medical expenses. Rhiannon O’Donnabhain, who was born a man, took the IRS to court and was able to claim $5,000 of her $25,000 in medical expenses for her sex-change operation.
- Body Oil. Body Builders who compete in body building competitions can deduct the cost of body oil.
- Cat food as a business expense.A junk yard owner had a problem with rats, so he put out cat food to attract their natural predator – cats! The cats took care of the rat problem, and the owner was allowed to deduct the cost of the cat food as a business expense.
- Free Beer. Yes, a brewery owner was able to deduct the cost of the free beer he gave away at his beer tasting promotions!
- Clarinet Lessons. The cost of clarinet lessons for one child was allowed as a medical expense to help correct his over-bite. REALLY?
Funny Tax Quotes
"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."
~ Ronald Reagan
- Depreciate your ostrich (or other livestock) as long as it’s used for breeding purposes.
- A loan to a deadbeat. You know that $500 you loaned your deadbeat friend who disappeared without paying you a penny? The IRS has been known to allow similar loans as a loss because, unlike business loans, you can’t go after anyone for the money.
- Cost of a swimming pool. When his doctor said it was medically necessary, a man was able to deduct the cost of installing a swimming pool and was allowed to claim the cost of upkeep as well.
- Breast implants. A topless dancer deducted the cost of breast implants as a business expense. The IRS took exception to this, but she took them to court and won her case!
- Cost of reversing a vasectomy. You can claim the cost of both the vasectomy and the vasectomy reversal as medical expenses. Ouch!
- Taking care of feral cats.A California woman was allowed to deduct some of the cost of cat food and other costs of taking care of feral cats as a charitable donation.If she had kept receipts and had a letter from the animal shelter verifying her work with feral cats, she might have been able to deduct the full $12,000 she spent on caring for the stray cats.
- Cost of a breast pump. If you are breast feeding your child, you can deduct the cost of a breast pump in your itemized deductions.
- Whale hunting. If you are an indigenous Alaskan you are legally allowed to hunt whales. Captains of legal whale hunting expeditions are allowed to take a $10,000 business expense deduction.
A Business Convention in a Tropical Paradise? Fine with the IRS!
- The power of prayer by a Christian Scientist practitioner. If you are a Christian Scientist and don’t believe in medical doctors, you can deduct the cost of visiting a Christian Scientist practitioner as a medical expense.
- An African Safari. No kidding, owners of a dairy business claimed that the safari was business related because it focused on activities of the wild animals. Apparently this was related to the dairy business because cows are animals…the IRS let them claim it!
- Cost of moving your pet cross country. In the eyes of the IRS, your pet is a personal effect, and you can claim cost of moving your pet as long as the move is associated with your job.
- A Trip to Bermuda or several other tropical destinations. The IRS will allow you to write off trips to business conventions in Bermuda, Costa Rica, Trinidad and Tobago, Grenada, Dominica, St. Lucia, Canada, Mexico and several other places including any destination to U.S. possession.
Who Knew that Tax Deductions Could be Entertaining?
It all goes to show you that IRS agents must get some fun out of reading tax returns. Well, at least these creative tax deductions and tax write offs can entertain us...and maybe they'll give you some ideas of how to take another deduction...legal, of course!
For a look at ways to Increase Your Chances of a Tax Audit and IRS Red Flags check my recent article.
Copyright ©2012 Stephanie Henkel