Canines, Beer, Breast Enhancements and Your Taxes.
Last month we talked about tax deduction requests that will drive your accountant bonkers. On the flip side, there are some extremely bizarre tax deductions and requirements that will throw you for a loop! In the spirit of April’s Fools Day, let’s have fun looking at some of the comical codes the IRS has dealt with!
Excuse me, but you’re going to have to document that sexual encounter.
One recent news story regarding the Missouri legislature is intriguing. While it may not be a “deduction” per se, it is requesting some bizarre documentation, all in the name of transparency. In January, it was proposed that any sex acts between legislators and lobbyists would have to be documented as a “gift” from the lobbyist on their monthly disclosures. It did state that while it would have to be documented, the legislators would not be required to mark down a dollar value. Also, if the acts occurred between a legislator and a spouse, they wouldn’t be required to be disclosed. So much for keeping business separate from personal!
Now that your wheels are turning, let’s play a little game of true or false.
Breast enhancements are tax deductible.
Surprisingly, this can be true! To qualify, your job would need to be exotic in nature. You have to be able to prove that it is a business expense; meaning that you will receive higher compensation or tips, as a result of the breast enhancement. This deduction is all thanks to a savvy exotic dancer in 1988. She had claimed her $2,088 breast enhancement surgery on her taxes, but was denied. She filed an appeal, stating she would be more highly compensated due to her larger breast size. The tax courts deemed this was true, and allowed her deduction. She was granted a “deduction” for her enlargement.
The IRS can take away my passport if I owe federal taxes.
True! This law was passed in December 2015 and went into effect in January 2016. It states that if you owe over $50,000 in taxes to the federal government, they can send a message to the State Department revoking your passport. The law is titled, “Revocation or Denial of Passport in Case of Certain Tax Delinquencies.”
Fido’s expenses are tax deductible.
True! At least part of his expenses would be. If you are a business owner with a dog, and you use that dog to protect your property, you can get partial credit for his ordinary expenses, such as food and vet bills.
Fido needs braces, but it’s okay, they’re tax deductible, too.
Nope! Nice try. People do really try to write some weird stuff off. Although, in their defense, there are some truly random deductions allowed out there!
I can write off this 30-pack of beer!??
Yes, but don’t get too excited. It can be written off in certain circumstances, though not for a party at your house on a Saturday night. A gas station owner was able to deduct beer that he gave away to customers, though. Different states have different laws on giving alcohol away, so first you need to make sure it’s legal prior to writing it off. Otherwise that beer may cost you a lot more money than you anticipated!
My pool is totally a write-off.
True! The catch? You have to have a condition in which swimming is a therapeutic remedy for it. So if your doctor told you that you have a medical condition that could be helped by swimming exercises, you might just be in luck. Be prepared to present documentation from your doctor!
My kid’s clarinet lesson are deductible.
Thanks to an orthodontist who fought tooth and nail, this is true. He debated that the repetition of playing the clarinet helps reduce a child’s overbite. Chances are if you get your orthodontist to sign off on it, you can write off clarinet lessons!
If I hire someone to burn down my business, I can write that off.
Sorry, that’s a definite no! Although, it has been attempted many times before. One brilliant person decided he would hire an arsonist to torch his failing furniture business, with the intention of collecting $500,000 of insurance money from the arson. That wasn’t even the craziest part: He then tried to write off the $10,000 it cost to hire the arsonist! Uhm, those are not the kind of “professional fees” that apply!
I’m a stay at home parent, but I’m going to deduct for a babysitter.
As long as it is so that you can volunteer or do charity work, then yes! This one is unexpected. While parents can deduct for childcare when they need it due to work schedules, it seems bizarre the IRS would allow deductions when you are a stay at home parent. This is a great one, though. Anyone who has been home all day with a toddler may suddenly take interest in volunteer work; which wouldn’t be so bad for our society!
Are these some of the craziest deductions you’ve ever heard of? Some of these definitely surprised me! I am going to have to say that I opened with the best story of all, though. I’m not sure you can get much more bizarre than having to disclose any sexual relations on your taxes!
What wacky IRS codes have you heard that have left your head spinning?