For the honest amongst us, claiming a tax deduction is usually a non-event. There are those, however, who will run the risk of ridicule and a visit from the tax man just to save a few dollars.
Here’s a list of some of the more bizarre tax deductions; some that were passed, some that were not. If you are to take one thing from this article, it’s that taking a risk on tax sometimes pays off . . . sometimes.
9. Gastric Bands
America is a country of expanding waistlines. Obesity rates continue to soar, becoming a major concern for the medical profession. The problem has become such an issue that obesity itself has become classified as a medical condition.
As such, bariatric surgery (the application of a gastric band around the stomach) has become a valid procedure ripe for a deduction. Deductions may be made on a portion of your surgery that exceeds 7.5% of your annual income.
8. Jewel-Encrusted Stars and Stripe Belt Buckle
David Brooks, ex-CEO of body armour manufacturing firm DHB Industries, was one such perk hungry exec, who took it all too far. He looted the company expenses fund for such tax deductible ‘office essentials’ as a 100-strong stable of purebred horses, a $60,000 sculpture of a bull and a jewel-encrusted stars-and-stripes belt buckle worth a cool $100,000 (see above).
His shareholders might have wanted a few answers from the connoisseur of class himself, but sadly the IRS got their hands on him first.
He is now in jail.
7. Swimming Pool
A swimming pool is essential for a hot summer’s day, but for most, the expense of installation and upkeep of said extravagance simply prices them out of the market. That is unless, like Ken Cherry, you have arthritis.
Cherry took advantage of his condition and built an indoor pool for his new house, deducting $4,000 worth of tax. The Tax Court allowed the action as Cherry was able to prove that his family rarely used the pool and it had been installed on medical grounds.
6. Cat Food
Most people shun stray cats as disease-carrying pests. Junkyard owners Samuel and Carol Seawright welcomed the poor felines with open arms and fed them as much tax-exempt cat food as their furry bellies could hold. How was this food tax deductible?
The cats became an asset to the company when they began warding off vermin, making the yard a safer environment for customers.
The IRS let them off.
5. Bodybuilder Oil
Bodybuilders coat themselves in slick, black oil to give their muscles definition and sharpness. While it looks a little odd to people not in the profession, it is an expense that can be deducted from your accounts, thanks in part to the pioneering action of one Corey L Wheir.
The part-time fitness enthusiast wrote off the sickly paint on his tax returns as a business expense. When the IRS rejected the claim, he took them to court and won.
4. Doggy Day Care
One dog owner couldn’t stand the idea of his dog being left alone in the house when he was at work, so he hired a dog-sitter to look after him. A noble gesture, but the tax office didn’t quite see it that way when he tried to claim the hired help as a day-care tax credit.
While the dog was an economic dependant, it was not classed as such on a tax form, because it’s a dog!The same rule would apply if you were to go away on business and leave your dog in a kennel; it’s classed as a personal expense.
Treatment for drug and alcohol abuse is almost a necessity for the modern-day celebrity. Thankfully, a good proportion of medication and treatments are tax deductible.
2. Carrier Pigeon
Our world is so full of technology that it’s hard to believe that such a thing as a technophobe still exists. It is also difficult to believe that one could run a business without the use of either a telephone or a computer, but instead with a flock of carrier pigeons.
This feat of ingenuity was accomplished by two business partners living in Pheonix who managed to run their company this way. Not only that, but the cost and care of the birds were tax deductible as well.
1. A Baby
This has to be one of the most bizarre cases of tax deduction ever seen. An Arizona businesswoman attempted to write off the cost of her own child, as the baby featured prominently on the advertising of her curtain and blind company.
She attempted to claim $26,000 for baby essentials such as diapers, childcare, food, clothing and toiletries. The IRS allowed a percentage of the claims, but not as much as she wanted.
There we have it. Proof (if any were needed) that people can get fairly creative when composing their tax-return forms. Although a few of these more bizarre items did escape the grip of the IRS, it is interesting to note the common mistakes people make when filling out their tax return forms.
Most of us would assume that certain expenses, such as commuting, funerals, a home business (only if it’s a dual-use room), interest and travel, are tax deductible, but they are not. It almost seems unfair, when such oddities are considered an essential business expense.