There are your common tax deductions and then there are others. The ultimate goal when doing your taxes is trying to minimize the amount of money that you give up to the government and with that in mind some people get pretty creative to say the least. Check out the article I wrote on some of the weirdest tax write offs for some good examples of people trying to go a little too far in minimizing there tax burden. Of course we would all hate to overlook a tax deduction. But then we come to those legitimate tax write offs that just sound crazy. I have several friends that I have talked tax strategies with and some of the deductions that have told me about are definitely more adventurous than I will ever be. But along those lines take a look at this list of the nine craziest tax deductions people were allowed to take.
1. Cat Food
The Seawrights were allowed to deduct $300 for cat food. Yes, food for those fuzzy four legged pets that think that bringing their owners dead rodents and birds is the “cat’s meow” of a gift for a loved one.
The Seawrights argued that the deduction of the cat food was a legitimate business expense because they fed some feral cats on a regular basis, and the kibble kept the cats around the junk yard that they operated. Because the well fed cats regularly roamed around the junk yard, they hunted and killed rodents and snakes; so the cats were a natural source of pest control that protected their business.
2. Heated Swimming Pool
Ken Cherry was allowed to deduct the maintenance costs of his new indoor pool.
He had been diagnosed with emphysema and his doctor gave him a prescription of regular exercise; so he decided to build a new pool. The court allowed him to take the deduction as a medical expense because he routinely used the pool for his prescribed exercise, and it was not regularly used by other family members. This is definitely a rare and heartwarming story related to the IRS.
3. Gambling Losses
Robert Mayo was allowed to write off more than $10,000 in gambling losses.
The courts found that because of the amount of time and money he spent gambling he had a legitimate profession as a gambler, and his losses were a business expense. That was a big win for this serious gambler.
In 1962, an orthodontist testified that an overbite in a child could be corrected by the child playing the clarinet. Years later, the testimony helped convince a court to allow a parent to deduct the cost of clarinet lessons for her child that had an overbite.
5. Huge Stash of Illegal Drugs and More
In 1975, Jeffrey Edmondson was facing charges of drug trafficking and was subsequently audited by the IRS. A claim was made that he owed them around $17,000 in back taxes on income that he had not declared. Mr. Edmondson then filled out a tax return declaring his earnings, leaving his occupation blank, and did what any savvy businessman would do. He deducted the cost of his inventory (marijuana and amphetamine pills), office supplies (scale and baggies), his home office, and his business related mileage. It worked, and the court allowed the write off – not sure that this savvy man had the same luck with his criminal case.
6. Very Large Breast Implants
Cynthia Hess had surgery to increase her breasts to the size of 56FF. Needless to say, the IRS did not initially allow for her cosmetic surgery to be deducted. She was able to convince the court that her implants were not practical, or applicable to anything outside of the scope of her work, and that having such an extreme breast size to enhance her appearance was necessary for her livelihood. She also argued that her dependence on her appearance was an industry standard; so it was a legitimate expense in her field. She announced her win on the Jerry Springer show.
7. Wrecked Car After Too Many Drinks
Like many people do, John Rohrs went out drinking and had a designated driver drive him home after he became beyond legally intoxicated. For some reason, shortly after he had been home Mr. Rohrs decided he was no longer intoxicated at a level that would impair his driving abilities, and decided he was going to drive someplace. Not all too surprisingly, he wrecked his car and the police discovered that he was legally intoxicated. He was unsuccessful in getting his car insurance company to pay on his accident claim, so he then sued the IRS for not allowing him to deduct his vehicle as a casualty loss. The courts found that because his actions did not meet the definition of negligent behavior (legal reasoning: He had a designated driver for when he thought he was legally intoxicated, but decided to drive only after he thought he was no longer intoxicated) he could take the deduction.
8. Sex Change Operation
A man was allowed to deduct more than $14,000 in medical expenses for his sex change operation. He had been diagnosed with gender identity disorder; and all of the treatments and procedures that related to his transformation into a woman were allowed except for one – surgery to increase the size of his breasts. The courts declined to include his costs for breast augmentation because it was considered a cosmetic surgery, rather than a surgery for the treatment of his disease.
This case begs the question: If he had been in the same line of work as Cynthia Hess (see #6), would he have been able to write off his breast augmentation as a business expense?
9. NBA Fine
Lamar Odom, husband of Khloe Kardashian, attempted to take a deduction of $12,000 in fines from the NBA. The IRS did not allow it and Mr. Odom originally sued as a pro se litigant (he represented himself). He argued that the fines were an industry standard because being fined by the NBA as a player was a very common thing for players; thus, a legitimate business expense. The IRS did not allow the deduction, but they allowed for Mr. Odom to pay them back, pennies on the dollar, for the amount in dispute.
He eventually hired counsel to handle and settle this matter.
Some of these do seem to be playing a very fine line when it comes to avoiding the IRS auditing
you and I am not saying for any of you to go out and use these tax deductions on your own. But if you do qualify and it is a legitimate deduction then by all means use it.
What are some of the crazier tax deductions that you have heard of?
Or better yet what are the most unusual tax deductions that you have actually taken?
KC Beavers is a semi-retired entrepreneur. The subject of personal finance has always fascinated him. In an effort to not bore those around him with all his love of personal finance as much he has come here to bore all of you instead.