Tax write-off; Yay or Nay?

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March 23, 2016 by Lisa Brammer

Have you already done your taxes? According to the IRS, 20-25 percent of taxpayers wait until the last two weeks to prepare their returns. If you are like me and are a part of this group I’ve got good news. This year we are going to have 3 extra days to either file or request an extension.

That’s right, the April 15th deadline has been extended to April 18th because the little-known holiday, Emancipation Day, celebrated only in the District of Columbia falls on April 15th.

Even with the extra days the deadline is closing in on us. We better get cracking.

While preparing your return have you ever thought about writing something off and then reconsidered figuring the IRS would never go for it. Well, here are a list of deductions people actually took on their taxes.  Some the IRS allowed, others they did not.  Let’s see how good you are at determining which deductions were allowed and which ones were denied.

  1. A swimming pool. Some guy put a swimming pool in his back yard after his doctor told him he needed exercise to improve his breathing. Did the IRS allow this deduction? Yes. They not only permitted this ‘medical expense,’ the upkeep of the pool, including the cost of chemicals, heat, and cleaning are also deductible.
  2. An arsonist. Believe it or not, a furniture business owner hired someone to burn down his store. Evidently the $500,000 insurance payout wasn’t enough, he deducted the $10,000 he paid the arsonist as a business expense. (Seriously, Dude?!) Did the IRS go along with this? No.
  3. Beer. A gas station owner gave free beers to his customers and wrote the cost of the beer off as a business expense. Did he get the write-off? Yes.
  4. Cat food. The owners of a junkyard in Louisiana regularly put out bowls of cat food to attract feral cats. The wild cats keep unwanted snakes and rats away from the property, making the yard safer for customers. Deductible? Yes.
  5. Clarinet lessons. A couple bought their child a clarinet and paid for lessons after the child’s doctor told them it could improve their child’s painful overbite. The IRS said yes to the deduction since it was a medical recommendation.
  6. Sex-change operations. After being diagnosed with a gender-identity disorder a gentleman underwent a sex-change operation and tried to deduct $22,000 for his out-of-pocket expenses. The tax court said yes to $14,000 for surgery and hormone replacement therapy.
  7. Whisky. A business owner thought a case of whisky would make a great client gift. He then deducted the cost of the whisky as ‘client entertainment’. Was it allowed? No. (Beer, but not whisky? Huh!)
  8. African safari. The owners of a dairy took a ‘business trip’ to Africa. Was the cost of the trip deductible? Yes. The IRS considered this particular business trip ‘ordinary and necessary’ since many of the activities of the trip centered on animals.
  9. Dancing lessons. Remember the swimming pool? Can you deduct dancing lessons as a ‘medical expense’ to relieve varicose veins, to cure arthritis or help with anxiety? No, says the IRS.
  10. Breast enlargement surgery. A stripper deducted the cost of her plastic surgery. Was it allowed? Initially it was denied, but the courts decided the implants did add value to her business and the deduction was allowed.

 

Believe me when I tell you the list of less-than-ordinary deductions  goes on and on. After seeing these I can tell you the only thing the deductions on my return are going to elicit is a yawn.

Founded in 1950, United Credit Service, Inc. is a full service, licensed revenue cycle management and debt collection agency in Wisconsin providing effective, customized one on one management and recovery solutions for our business partners. Visit our website at http://www.unitedcreditservice.com, call 877-723-2902 or check out our YouTube video.

 

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